Nakumatt Supermarkets chief executive Atul Shah will be investigated over the loss of Ksh 18 billion worth of stock, Peter Kahi, the troubled retail chain’s court-appointed administrator, said on Thursday. Nakumatt went into voluntary supervision earlier this year after seeking protection from its creditors.
Nakumatt, which grew from a mattress shop in Nakuru to have branches across Kenya and East Africa, was forced to shut more than a dozen outlets last year as it struggled to repay its suppliers, landlords and other creditors billions of shillings.
Kahi said he would seek a forensic investigator to investigate why Shah wrote off stock worth Ksh 18 billion in May, before the company ground to a halt.
“I don’t think it is something which happened within a year or a day. Maybe it is a build-up of so many years. Because 18 billion is quite a big sum, just to occur in one day,” he told Reuters by phone.
“Of course that is a big write-off, which according to them (the company) it’s basically pilferage, shrinkages and theft by staff and what … But now it is for him to explain, since he was the chief executive officer.”
Shah declined to comment and referred Reuters to Kahi when contacted for comment.
When it sought protection in October, Nakumatt had 4,000 staff, but it has closed several outlets since then.
The company sought protection using Kenya´s newly enacted company laws, which provide a pathway for distressed firms to avoid complete collapse.
When he appeared before the Senate Tourism Trade and Industrialisation Committee this week, Kahi said the stock was written off on grounds that there were stocks in the system that were actually not on the retail chain’s shelves.
“It means that the books were massaged a long time ago. It means there was cooking of books. I am looking for money to hire a forensic investigator to tell us where the money is,” he said.
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“We are told some money may have been siphoned out of the country. This is a lot of money that disappeared from the company’s books,” he told committee, chaired by Kirinyaga Senator Charles Kibiru. – Additional reporting by Edwin Mutai/Business Daily.