DJ CK and 13 others to face Sh147m fraud charge
Tycoon Chris Kirubi was yesterday charged with conspiracy to defraud retail chain Uchumi Supermarkets Sh147 million four years ago.
The criminal charges were instituted yesterday against Kirubi and six former members of Uchumi’s board of directors at the Nairobi Chief Magistrate’s Court.
Kirubi who is also the proprietor of Capital Media, was not present in court. But the Director of Public Prosecution Keriako Tobiko obtained summons requiring that Kirubi personally appear in court next Friday to answer to two charges. The summons were issued by Senor Principal Magistrate Stella Muketi.
Kirubi who served as the chairman of the board of directors of Uchumi before it was placed under receivership, is alleged to have conspired with 13 other suspects to defraud the company of the money. He resigned in July 2004 as the chairman of the board.
Others charged alongside the millionaire are former Uchumi managing director Kennedy Thairu, former directors Francis Emmanuel Oyugi, Isaac Awuondo, Joseph Munyeria Munene and Nigel Ralph Pavit.
Only one of the former directors, Kezzy Wanjiru Muniu, appeared in court. Also in court was the managing director of Lloyd Masika, Stephen Njoroge Waruhiu. Waruhiu was represented by Mutula Kilonzo jnr. They both denied the charges and were each released on a cash bail of Sh400,000.
All the 13 suspects including the real estate company Lloyd Masika Ltd are accused of fraudulently causing Uchumi, Aga Lhan Walk branch to be sold at Sh147 million to Allgate company, associated with the core suppliers of the supermarket. The same property was then leased back to Uchumi Supermarkets Ltd at a monthly rent of Sh 1.7 million.
The deal was done without a prior independent valuation and open competitive process. The offence was committed between March 27, 2003 and November 30, 2004.
Kirubi is also accused of breaching the trust of the public by approving the sale without first obtaining an independent valuation report. The act was not in the best interests of the supermarket or its shareholders, according to the documents filed in court.
He allegedly committed the offence on June 11, 2004 at Uchumi Supermarkets boardroom in the Kenya National Trading Corporation buildings along
The six former directors are also accused of approving the sale before obtaining an independent valuation before the approval of the sale.
Others to be charged with conspiring to defraud the supermarket are businessmen Deepak Shah, Atul Shah, Amin Manji and Samash Manji.
Uchumi supermarkets was founded in 1975. It was the largest supermarket chain in the country and had opened branches in most major towns and also in
The supermarket chain was forced to close for a month in 2006 after its financial institution became too precarious to continue operations. Unable to meet its obligations to the suppliers and faced with mounting debt, the supermarket was closed down to allow the government time to appoint a new management team which was expected to re-structure it and put the chain on the path of profitability.
The appointment of a new management team headed by Jonathan Ciano, the infusion pf Sh675 million from the government and an extra Sh300 million from shareholders as well as an aggressive marketing campaign to restore public confidence in the chain has seen Uchumi make a turn around.
It reported a Sh113 million profit before tax on revenues of Sh5.2 billion in the last nine months.
Uchumi was suspended from the Nairobi Stock Exchange, and analysts believe the trade ban will not be lifted soon because of accumulated losses.
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