Nakumatt creditors’ meeting aborts
By Dominic Omondi | September 5th 2019
A meeting to discuss settlement plan for Nakumatt creditors was called off yesterday to allow for auditing of the ailing retailer’s books.
This is a blow to the creditors who were banking on the meeting to know their fate in a bid to recover money owed by the troubled retail chain which has since been placed under administration.
According to the firm’s administrator, Peter Kahi, the second creditors’ meeting, which had been scheduled for today, will now be held at a later date once the audit process is complete.
The administrator confirmed that the audit firm undertaking the scrutiny of the retailer’s books covering three years had not completed the job.
“We have petitioned the High Court for leave to postpone the second creditors’ meeting pending the completion of the crucial financial audit,” said Mr Kahi in a statement.
“This is an inadvertent last minute development, as we had expected the process to be complete by now to allow for the creditors’ engagement. Creditors will be advised in due course of the new date for the meeting once we have received the audited accounts.”
As per a High Court ruling last March, the administrator had been directed to convene the meeting.
It was to be held once a clear financial position of the company and an audit had been undertaken by an audit firm through a bidding process and M/S Parker Randall Eastern Africa was selected.
This comes at a time when an amendment made on the Insolvency Act gives specific conditions under which a moratorium against liquidation for a company under administration can be lifted.
Creditors, according to the new amendments to the law, only need to prove to the court that they are in financial distress to have a company that is under administration liquidated so that they can get their money.
Apart from Nakumatt, the other companies under administration include cement manufacturer Athi River Mining (ARM).
In March last year, a report by Nakumatt’s court-appointed administrator lifted the lid on the retailer’s hitherto highly guarded financial books.
Over the 10 months between February and December last year, Nakumatt reported a staggering Sh23.4 billion net loss, down from a Sh3.2 billion loss it reported in the previous financial year from March 2016 to February 2017.
The retailer, Kahi disclosed, has made significant business recovery and is now enjoying an almost breakeven operating position for four of the six operational branches.
Two branches are also expected to attain breakeven levels by the end of the year.
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