Nakumatt employees claim Sh374 million in salary arrears

Former employees of collapsed Nakumatt supermarkets are claiming Sh374 million in salary arrears for working six months without pay after trouble hit the retailer.

The unionised employees last week voted against liquidation of the former retail giant hoping that its Sh38 billion debt to creditors would be rescheduled and paid overtime after a turnaround plan was tabled.

This was however ruled out, with the administrator saying a turnaround would take years and be costly, and the retailer would likely make more losses in the period.

More than 90 per cent of Nakumatt creditors, including suppliers, banks and landlords, voted for liquidation.

Kenya Union of Commercial, Food and Allied Workers (KUCFAW) Secretary-General Bonface Kavuvi said that the court-appointed administrator, Peter Kahi of consultancy firm PKF, had “fixed his mind” on liquidation.

“Rescheduling the debts might have given the company lifeline … it would have secured our debts, employees and the supermarket brand that is popular even outside Kenya,” he told The Standard in an interview yesterday.

KUCFAW represented about 3,500 Nakumatt employees.

Mr Kavuvi said the money owed is exclusive of Sacco dues, private insurance cover, and redundancy benefits. The union is also owed Sh17.9 million.

Sold branches

However, even if paid, an employee can only get a maximum of Sh200,000 regardless of how much they are owed.

Mr Kahi last week said that according to the law, he was required to pay four months of wages and this is capped at Sh200,000.

The only “tangible” cash that Nakumatt has is Sh422.5 million received after selling some of its branches to rival Naivas.

The court is expected to appoint a liquidator tomorrow who will guide on the payment ratios for various creditors.

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