A law that could have saved Uchumi from being shut down by its creditors came 24 hours late.
Kenya’s oldest supermarket chain is now set to wind up over its debts, after it lost the first round of a court battle, whose success was hinged on the said law.
The new legislation, the Insolvency Act No. 18 of 2015, which would have effectively stopped the creditors from proceeding with a winding up case against the retailer, is yet to be fully operationalised.
The new Companies Act cannot be used to wind up a company until Parliament passes procedures to shut down a firm under the Insolvency Act of 2015.
The procedural rules are the ones that would enable, or invoke the court’s jurisdiction to hear and determine such disputes.
Parliament is required to enact the procedural rules and guidelines required under the Insolvency Act No. 18 of 2015 for liquidation of companies.
Until that happens, creditors today have been placed in limbo by the lawmakers as far as filing winding up cases is concerned.
Uchumi was banking on a precedent set by the winding up petition for Blue Bird Aviation Ltd. In the case, High Court judge Eric Ogola ruled that the old Companies Act cannot be used to wind up a company until Parliament passes procedures to shut down firms under the Insolvency Act of 2015.
However, High Court judge Farah Amin has found that the retailer cannot rely on that precedent because the creditor, who has sought to wind it up for its failure to pay debts, had actually commenced the process a day before the law changed.
San Giorgio Ltd, while relying on Section 220 of the Companies Act Cap 486, now repealed, issued a statutory demand to Uchumi, dated November 5, 2015, stating that unless it is paid the outstanding sum of Sh53,106,754 within three weeks, it will petition the High Court for a winding up order without further notice.
“The creditor was entitled to rely on the law then applicable. Uchumi had due notice of the outcome and the procedure that would be applied. Payment was not made and the subsequent steps followed,” said Justice Amin.
Loved shopping at Uchumi but now it looks painfully empty and poorly stocked. They stopped offering pies, sandwiches and strudios at their branches (Aga Khan Walk) which were some of my favorite snacks
Damn. I’ll miss the ham and cheese sandwiches. And the wrongly labelled and underpriced oil additives. A can of Wynns Supercharge was going for 144 bob instead of about 500.
na bado the list will get longer,it was mumias sugar then, sasa uchumi.
kenya airways next ,
all have one common characteristic, partially owned by the govt.
the mofos who stole from these companies currently walk free enjoying their loot.
Uchumi should just be allowed to die, hii upuss ya tax payers pumping a few billions every 5 years inafaa kuisha, we pay, management eats it. It’s not a critical sector, there is enough competition in the retail space already.
I was shocked to learn that uchumi has only 700 employees. This company was long gone. Kipngetich made a strategic error to work at this place. This is one company the government repeatedly bails out- a looting conduit. Another is national bank, panpaper, etc. These companies have no reason to be in existence. Government officers and legislators use them as looting avenues for money laundering. KQ, nssf, are others
Other than Africa , the govt is everywhere ! But just like everything else, it’s on a need to know basis.heck even the Catholic Church owns one of the major supermarkets in the u.s - if only we had good managers, then uchumi would be a billion $$$ corp instead of filing for bankruptcy.
What about the one next to Naivas karibu Oil Libya. That supermarket looks like you just walked into a scene of Walking Dead and all humanity is extinct. It’s my most favorite supermarket for extremely simple stuff since there are never any queues but siku hizi hata soda hakuna
I don’t think it was a bad move since Mwangi was not going to leave anytime soon. Perhaps when he turns 90 :D:D:D:D
Even Naikuni moved from a loss leading company and is now a director in 9 companies.
The only people that should be worried are the junior staff. Kipngetich did try to streamline operations but the hole had been dug too deep. He will have a job lined up for him in the next 6 months. You wait and see.:D:D
hapo sawa…i miss this Agakhan walk branch…chapo zao na samosa zlikua tops…lakini mandazi ilikuanga mbichi ndani…n their overpriced clothes.:D:D:D
i THINK they are the pioneers of eatery-inside-supermarket concept
Umesahau huyu: DJ Chrismas K screwed Uchumi before it reached puberty…he is a billionaire now…n an enterpreneur consultant…n he regularly holds social media conferences on how to succeed in business. They now call him a tycoon and a business mogul.
