According to the East African, the closure of Uchumi was triggered by a standoff among the board of directors about the company’s plan to raise another 500 million shillings ($7 million) on top of the 1.2 billion raised last year in the rights issue.
The East African also highlights dumping of shares on the day before Uchumi closed. In the last few months, certain investors offered blocks of shares at the NSE – 11.9 million (December 27), 6.2 m (December 29) and 5.2 m shares in mid-April.
The former Chairman and largest shareholder for many years (till 2004), Chris Kirubi, appeared on KISS FM’s political show Crossifre on Sunday evening. Despite the twin controversial events of Saturday – launch of Narc-Kenya and the anointing of William Ruto as a Kalenjiin elder, the entire hour was spent discussing the closure of Uchumi with Kirubi on the spot as he defended his tenure and role at the company.
- Kirubi stated that the 2005 rights issue was criminal – and that the public should never have been allowed to inject 1.2 billion shillings into Uchumi give its precarious situation.
- The management misled the board with projections and information about the company’s expansion and performance. The board also fired MD Thairu for these reasons.
- Kirubi felt that the company did not have the expertise to manage modern supermarkets which was why he made arrangements to have a South African partnership.
- Senior managers robbed the company for many years.
- Kirubi defended his supplier role at the company, saying he did business for many years before he became chairman and he saw no reason for this to stop.
- The Minister of Trade is playing politics, by threatening to investigate of Uchumi – since the Ministry PS has always been a member of the board of Uchumi and was privy to all board matters.
- He said having government as a shareholder in Uchumi was detrimental and limited the company from being competitive. Government has no business being in business.
- He also read out portions of his 2004 resignation letter as Chairman, which he said was copied to all directors, regulatory bodies and the Government warning of an impending collapse of Uchumi.