Govt begins prosecution of former Uchumi directors

The government has made good on its promise to prosecute former senior managers of Uchumi Supermarkets accused of mismanaging the country’s oldest retail chain.

Former Uchumi Chief Finance Officer Chadwik Omondi was Wednesday night arrested by officers from the department of Criminal Investigation (DCI) for questioning over his role in the plunder of the retailer.

The move comes the government said it had gathered enough evidence to prosecute former directors.

“The Cabinet Secretary’s understanding is that enough evidence has been gathered to press charges against persons who may have mismanaged its cash and assets. There will be accountability,” Statehouse Spokesman Manoah Esipisu said during his weekly briefings on August 7.

DCI officers are also said to be looking for former Uchumi chief executive officer Jonathan Ciano.

The evidence is contained in a forensic report prepared by KPMG which implicates former directors with financial mismanagement.

From flawed procurement measures to weak quality controls, the report paints a grim image of a management team that allowed Uchumi to be run down.

Mr Omondi and Mr Ciano were fired by the board in June 2015 on grounds of gross misconduct and negligence.

The two are also adversely mentioned in the KPMG Factual Findings Report as people with a case to answer.

Riddled in debt and inability to pay its suppliers, Uchumi recently negotiated a payment deal with suppliers to drop a wind up petition over unpaid dues.

Part of the Uchumi Supermarkets’ recovery plan include the injection of fresh capital to steer itself back to profitability.

On the cards is the injection of Sh1.2 billion by the government, which holds a 14.6 percent stake in the retailer through the Ministry of Trade.

However after previously bailing out the retailer in 2009, the government has been hesitant to inject the capital until the firm proved it had a sustainable plan.

Part of the condition attached to the government bailout is the prosecution of all those found to be culpable of running down Uchumi.

“The money going into Uchumi comes from the hard earned taxes of Kenyans. They want to satisfy themselves that it will be used properly. One way to do that is to ensure there are consequences for past misuse,” Mr Esipisu said last month.