The perfect storm is brewing at mining company Athi Stores Ltd as directors fight over Sh2.5 billion allegedly embezzled from the firm, while the taxman seeks his pound of flesh and disgruntled workers demand Sh60 million in terminal benefits.
The boardroom wrangles pit two families against each other in what could set the stage for a painful end to a company that has in the last 50 years grown into one of Kenya’s top miners and suppliers of limestone, gypsum and pozzolana.
On one side are the children of Athi Stores founders – Sher and Arjit Varma – who claim they have been locked out of the company’s affairs and books of accounts.
The Varmas have sued Athi Stores seeking a court order for a forensic investigation into the company, and to hold executive director Shammit Ghai responsible for any missing or misappropriated funds flagged by the scrutiny.
And the other corner has brothers Shammit and Rajan Ghai, who bought Athi Stores shares in 1996 when the Varma family was looking to expand its operations.
Unpaid taxes
But even as the wrangles continue, the Kenya Revenue Authority (KRA) is seeking to attach Athi Stores’ assets to recover over Sh5 million in unpaid taxes.
A group of workers has also threatened to sue the company for failing to pay terminal dues totalling Sh60 million. Some of them claim to have served the company for more than 30 years but left empty handed.
They fear that Athi Stores could be sold or it may wind up its operations before the workers are paid, and have written to the firm demanding settlement of the dues.
Sunit, Reena and Shamit Varma claim they have only been able to obtain books of accounts for the years 2008 to 2016, and that the documents revealed how the Ghai brothers allegedly siphoned Sh2.5 billion from Athi Stores.
Shammit Ghai, the executive director, claims the Varma family has a bone to pick with him for scuttling their plans to sell a portion of Athi Stores’ land to Bamburi Cement.The land Athi Stores mines was charged as security to Standard Chartered Bank for a loan in the 1990s and the Varmas were unable to keep up with repayments.The Varmas at the time sought another loan from KCB and repaid the Standard Chartered debt with some of the proceeds. Athi Stores was, however, back to square one as it could not keep up with the loan repayments to KCB.Other […]
