Last Time It Was Naivas, Now It;s Tuskys Siblings At War...

The planned sale of a majority stake in troubled Tuskys Supermarket has triggered a fresh round of fallout among the siblings who own Kenya’s second largest retail chain that could scuttle the deal.
Yusuf Mugweru, the fourth born of the seven siblings, has vowed to block the deal, saying wrangles among the retail chain’s shareholders are yet to be resolved.

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Mr Yusuf Mugweru (left), one of the Tuskys Supermaket directors, and his lawyer Philip Murgor outside the Milimani Law Courts

Mr Mugweru, with a 17.5 per cent stake in Tuskys, reckons his brothers are yet to disclose the whereabouts of some Sh1.6 billion that was the subject to a court suit and is also demanding a forensic audit of the store’s accounts covering the past eight years.
Tuskys is seeking to sell a majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer as part of efforts to raise cash to pay suppliers and win back their confidence.
“They reached out to us last Sunday to support the share sale, but we have declined unless past problems are resolved,” Mr Mugweru’s lawyer, Philip Murgor.
“A transaction in the nature of a buyout cannot be contemplated, without the express and written approval of all shareholders. Our client has not consented or approved such a transaction.”
Nearly a decade ago, the retail chain was rocked by a family feud that threatened to tear it down and pulled in the third generation heirs, sparking private and public spats.
Two co-owner brothers of Tuskys – Stephen Mukuha and George Gachwe –were four years ago charged with theft of Sh1.64 billion from the retail chain.

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A Tuskys Supermarket branch in Nairobi. FILE PHOTO | NMG

[SIZE=7]Tuskys shareholding[/SIZE]
Shareholder Stake in Tuskys (%)
Yusuf Mugweru Kamau18
Stephen Mukuha Kamau18
Sammy Gatei Kamau18
George Gachwe Kamau18
Mary Njeri Kamau (deceased)10
Mary Njoki Kamau10
John Kago Kamau10

Yusuf Mugweru Kamau opposed the proposed merger with Nakumatt back in 2017
Source: Court documents
[I]Get Data[/I]

Their arraignment was the culmination of an investigation that began in February 2012 when Mr Mugweru raised the alarm over the theft of funds from the retail chain’s accounts’
In a judgment issued on November 19, 2013, High Court judge George Odunga dismissed the case and asked the siblings to settle their differences for the sake of the business.
“The differences persist and we cannot proceed with the share sale deal unless settled,” said Mr Mugweru.
His objection looks set to complicate Tuskys’ commitment to get the backing of all shareholders and close the share sale deal in the coming weeks.
The prospective equity investors want all the Tuskys’ seven shareholders to agree and make legal commitments to the sale of a majority stake in the company.
“The board is working to obtain an irrevocable letter of undertaking signed by all shareholders and backed by power of attorney to make this process flawless and to enable equity injection in the shortest time possible,” Tuskys informed its major suppliers, who are owed billions of shillings, in a meeting last week.
Sources familiar with the share sale deal told the Business Daily that the potential investors are concerned about committing resources to a deal that could be scuttled by insiders.
They are also fretful about the possibility of ending up with an aggrieved minority shareholder who could rock the boat from within.
The jitters are based on previous fallouts that saw Mr Mugweru in 2018 scuttle a merger deal between Tuskys and then cash-strapped Nakumatt, which has since collapsed.
The seven siblings took over the ownership of Tuskys in 2002 after the death of their father and the retail chain’s founder, Joram Kamau.
Mr Mukuha, Mr Mugweru, Mr Gachwe Sammy Gatei own a 17.5 percent stake in Tuskys each, according to disclosures in a previous court case.
John Kago, Mary Njoki and Mary Njeri (deceased) were listed as holding a 10 percent stake each.
Details of the proposed transaction, including the size of capital to be raised, are yet to be disclosed.
The company told suppliers that more prospective investors had reached out to initiate talks.
“There are now firm offers from credible international investors and two more are expected over the weekend,” the company said.
“The offers will be tabled to the board, the family and bank, with an expectation of an approval quickly. Board and advisers are clearly aware of the pressure to close quickly.”
A transaction adviser tapped to guide Tuskys on the deal reckons that the family-owned retail chain is seeking to sell a majority stake to a PE firm and a supermarket operator.
The retail chain is expected to benefit from the supply of both new capital and technical expertise in operating a major retail chain.
Tuskys, which has 53 stores and is Kenya’s second biggest retailer behind Naivas, was last month ordered by the Competition Authority of Kenya (CAK) to clear supplier bills worth Sh1.2 billion by July 16 under new rules meant to cushion suppliers from delays.
The retailer paid Sh2.7 billion before the deadline.
Tuskys, which has not said how much it still has to pay, has renegotiated terms for its credit facilities and has been in talks with suppliers to keep its stores stocked.
For weeks now, shoppers have complained of missing essential goods on the retailer’s shelves, suggesting that some suppliers are severing ties with the company amid a cash crunch, which the retailer has blamed on restrictions imposed to curb the spread of Covid-19.
If successful, the proposed deal will mark the latest share deal in the increasingly competitive and capital-intensive supermarket business.
Tuskys’ top rival Naivas, for instance, recently raised more than Sh1.5 billion from a consortium of investors, including the International Finance Corporation (IFC) and private equity firm Amethis, for expansion.
The retail sector has seen two major supermarket chains collapse in recent years, including Nakumatt.
The dissolution of the Nakumatt business created an opening for other international retailers, including France’s Carrefour and South Africa’s Shoprite, increasing competition in the retail space.

Chikuyu na wranglings ya pesa ya family. Its the norm i guess,until panga zitolewe

Meffi hao. Wanauza shell of a business. Huyo Investor instead of buying hizo worthless chieth of shares afadhali aanzishe yake apoach kila staff and systems. Tuskys ni hewa
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Hawaoni pesa zote zitaishia kwa lawyers

This is what happens when you leave your inheritance to entitled bastards. They run to the ground.

he’s buying a brand and the strategic position of those businesses then arudi kwa mfuko and restoke them. The more they wait as the wrangles continue the more the brand loses value juu shelves bado ziko empty.

Why are large Kenyan companies operated like the government.
Managers and CEO stealing from their own companies. This is crazy.