Questions CMA wants former Uchumi bosses to answer
Barely a month after being left off the hook, three former Uchumi directors James Murigu, Bartholomew Ragalo and Joyce Ogundo are back on the CMA chopping board.
The regulators penalties against the three were quashed in January by Justice George Odunga but CMA has drawn up new charges.
CMA wants the board member to explain why Uchumi altered the Information Memorandum that was approved by the regulator when it made its rights issue in 2014.
Apparently, CMA approved an IM stating that the money would go into expansion growth and opening 11 branches and refurbishment of 5 branches.
The supermarket inserted a clause to state the money was meant for ‘working capital’ for the expansion and used Sh817 million of the Sh895 million raised to pay creditors.
Uchumi also paid Sh89 million as expenses for the rights issue instead of the Sh75 million indicated in the Information Memorandum.
The former bosses are to explain why they allowed former CEO Jonathan Ciano’s wife to supply vegetables to Uchumi in a complete conflict of interest.
Elihon Limited and Glad Mark Limited owned by Mrs. Jane Waithera Ciano were paid Sh135 million and Sh16 million respectively between 2011 and 2015.
The Board has to explain why the supermarket was revaluing Kasarani mall property on Thika road to prop up profits when they knew its ownership is in question.
They are accused of lying about the financials for Uchumi by allowing the sale and leaseback deal with Rentco to be included in the financial statement when the money had not been received yet.
They even understated overdraft by half reduced the value of unpresented checks just to make Uchumi look profitable yet it was loss-making in 2014.
They will also have to explain why they approved the sale of Sh500 million in assets to Cooperative Bank and Sh1.1 billion to KCB without telling the public.
