Creditors differ as Nakumatt awaits its fate

Troubled retailer Nakumatt will have to wait until next week to know whether it will be allowed to appoint an administrator to keep the business running or await liquidation.

The High Court in Nairobi yesterday listened to the divided opinion of creditors whose money is tied up in the cash-strapped retailer that has up to now closed about 20 branches.

The case has so far attracted about 120 creditors. Overall, the retailer owes between Sh30 billion and Sh40 billion in secured and unsecured debt.

In a packed court session that lasted about one and half hours, creditors could not agree over whether or not to support the appointment of an administrator at the troubled retailer.

Most of the dissenting voices accused the retail chain of not making full disclosure of its asset position. But according to Mr Kamau Karori, who represented Nakumatt in court, the retailer had decided to keep the details close to its chest so as not to jeopardise the ongoing share buyout talks with its rival Tuskys Supermarket.

“Disclosure of this information at this stage will scuttle these discussions for the simple reason that Tuskys have insisted on confidentiality,” Mr Karori told the court.

This did not go down well with some creditors who argued that lack of full disclosure from their debtor had made it hard for them to make an informed decision.

Secret justice

Kamau Kuria, appearing for Githunguri Ltd, argued that by not disclosing the information to creditors and opting to present it to the judge, the retailer was seeking “secret justice”.

“We don’t trust them. We have asked the same question on what exactly the administrator wants to do,” he said.

Parkside Developments, another creditor in the proceedings, asked the court to declare Nakumatt insolvent.

In a sworn affidavit by its General Manager Bizzu Kanja, the retailer’s application was merely a “delaying tactic to forestall imminent and inevitable liquidation”.