A CASE OF UCHUMI SUPERMARKETS LTD

Capital reconstruction.
On first October 2004 Uchumi Supermarkets announced a net loss of Sh699 million for
the year ended June 30, 2004. The results represented a worsening of the company’s
financial position from a net loss of Sh196 million recorded in the previous year. Mr
Kip’ngetich Bett, the retail chain’s Chief Executive confirmed that the losses had
superseded the profit warning of Sh400 million that it had issued earlier. Loss before tax
stood at Sh654 million, far more than the Sh246 million reported in the previous period.
The losses were attributed to lower margins, a drop in sales and an increase in operating
costs that stood at Sh2 billion in the period under review. Despite the increase in loss,
Bett said the company’s outlook was bright if only an appropriate and intensive
restructuring programme was put in place. In 2015, Uchumi closed the Syokimau and
Meru branches in Kenya. In 2016, the retailer had exited the Tanzania and Uganda
markets in a bid to stop financial bleeding. It has also closed Taj Mall branch in Nairobi
alongside its outlets in Eldoret, Kisii, Nakuru and Embu.

Historical background
Uchumi Supermarkets Ltd is one of the largest commercial retailing companies in the
country, employing over 1,000 people. Currently, Uchumi operates 4 Hyper stores, 8
Supermarkets and 2 Convenience Stores. Uchumi is represented in major towns in Kenya
namely Nairobi, Karatina, Eldoret and Meru.

In December 1975, Uchumi was incorporated under the Companies Act (cap 486). The
main objective of creating Uchumi was to have an enterprise for equitable distribution of
essential commodities, affordable prices whilst creating an outlet for the then fledgling
local manufacturers. This noble idea marked the beginning of Uchumi Supermarkets
limited and on 17th December 1976, Uchumi shareholders- ICDC, Kenya Wine Agencies
Limited (KWAL) and Kenya National Trading Corporation (KNTC) - all Government
owned parastatals entered into a management contract with Standa SPA of Italy. Standa,
a leading supermarket group with a presence in Europe and vast retail experience was
given the task to manage and train Kenyan personnel who would eventually take over the
running of the organization. The first three branches were opened in 1976 with the
Market Branch marking the first Milestone. Uchumi became a trendsetter in low pricing
to the advantage of all consumers, while at the same time maintaining high standards in
quality of goods and services.

In the 1990's Uchumi spearheaded the hypermarket concept in Kenya. The introduction
of the hypermarket concept and specialty shops has been a runaway success. Uchumi
places inordinate emphasis on the value of continuous training and concern with staff-
customer relations. The key ingredients of Uchumi's runaway success was a keen focus
on the buying culture of Kenyan shoppers, close working relations with suppliers and
good management-staff relations. Uchumi has avoided concentrating on imported
foodstuffs and other foreign products that are locally available. This has led to the
improvement of the quality of processed products sold by local companies. Fresh juices,

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fruit squashes, breakfast cereals, processed teas, coffee are a few of the local products
that are now sold en masse in her outlets. Uchumi emphasizes growth away from city
centers, focusing instead on the residential shopper, enabling them to remain closer to the
hearts (and ultimately the pocket and purse) of the average Kenyan.

Chronology of Important Events

 1975- Uchumi is founded as a public limited company
 1976 - Uchumi Market, Westlands, Aga Khan Walk branches opened. Uchumi
shareholders enter into a management contract with Standa S.P.A of Italy.
 1992 - Uchumi Supermarkets Ltd goes public with 60 million shares floated at the
Nairobi Stock Exchange. The first branch outside Nairobi - Nakuru East opened.
 1997 - Uchumi’s first Hypermart opens to its customers along Ngong Road.
 2000 - Uchumi spreads its wings to the Coastal region by opening Station Hyper.
 2002 - Uchumi crossed the Kenya borders and set up a store in Kampala, Uganda.
The store located in Kampala’s Nakasero suburb has been an instant hit amongst the
residents of the metropolis.
 2004- Uchumi announces a net loss of Sh699 million for the year ended June 30,
2004.
 2006 (June)- Uchumi is closed down and put under a receivership. It is
subsequently delisted from the NSE.
 2006 (July)- Uchumi is reopened under interim management and a caretaker
administrator.
 2011- Uchumi returns to profitability and it is relisted in the NSE.
 2014- Uchumi makes a rights issue to grant it meet its working capital requirements
necessitated by opening of new branches Kenya, Uganda and Tanzania.
 2015- Uchumi issues a profit warning and closes its outlets in Syokimau and Meru.
 2016- Uchumi exits Uganda and Tanzania markets. It also closes Taj Mall branch in
Nairobi alongside its outlets in Eldoret, Kisii, Nakuru and Embu.

Due to its legacy, having been established in the 1960s, generations of Kenyans,
particularly in Nairobi grew up under its patronage. With a major government
shareholding no one believed that the giant Kenyan retailer could run into financial
trouble.

But signs that things were not well began when Titus Mugo, who had succeeded long-
time managing director Suresh Shah, abruptly resigned in 2002. Kennedy Thairu was
then appointed chief executive in the same year. With talk about product mix and
differential pricing becoming common, actual marketing took a back seat. The result was
that under Mr Thairu's watch, Uchumi hit troubled waters. But soon employees were
demonstrating on the streets calling for the ouster of the chairman, Chris Kirubi.

A massive layoff followed and that was the beginning of the loss making period. Mr
Thairu sought to explain this as a tiny price to pay for the long-term benefits. But the loss
making continued. Suppliers and creditors soon cut off deliveries, claiming Ksh1 billion
($13 million) in unpaid receipts. With shelves emptying, customers heading elsewhere,
the 2003 and 2004 results showed the full extent of the damage the retail giant had

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undergone since Mr Shah's retirement. Explanations for this state of affairs has been fast
and furious, but focus has remained on what should be the role of the chairman of the
board on the day to day running of an organisation and his relationship to the CEO.

The staff demonstration pointed to the board's interference in the running of Uchumi,
giving some credence to charges of insider trading, with board members and senior
management being accused of Uchumi’s troubles have been heavily documented in the
media in the last two years, there are still many questions that remain unanswered.
First, no independent forensic audit has been done so far to establish the real causes of
the deterioration of the retailer’s finances in the five-year period that businessman Mr
Chris Kirubi and Mr Kennedy Thairu chaired the board and managed the company
respectively.

The issues range from how Uchumi under the Kirubi/Thairu reign could have bought
such low quality and overpriced slow-moving inventory — which was sold at throwaway
prices to raise cash — that has so far resulted in losses amounting to more than Sh2
billion in just three years and why auditors PricewaterhouseCoopers (PWC) never caught
a whiff or mentioned it to shareholders.

Then there were the controversial real estate deals that the company got involved in its
Sh2.5 billion branch expansion and uncontrolled growth in branch operating expenses.

For instance, Uchumi advanced a wholly-owned non-trading subsidiary, Kasarani Malls,

Sh110 million to buy land on Thika Road for store development, yet this investment only
seems to have yielded little gains for the company. Yet, in auditing, for retailers like
Uchumi nothing is as important as watching closely the valuation and movement of
inventory. Other than the expensive branch network expansion that did not pay off, the
biggest cause of Uchumi’s failure stems from the way its inventory was managed.

At one point, confidential internal documents showed that Uchumi was holding inventory
worth more than Sh1 billion and was expected to make a stock write-off of more than
Sh100 million. In the last two years, much of Uchumi’s losses have stemmed from
management selling inventory that the company spent millions of shillings to acquire for
fire-sale prices (Great sales!).

The October 30, 2001 earnings announcement of a 68 per cent decline heralded the
beginning of a trend. Prior to this, the supermarket had reported profits annually for 14
years, maintained a significant growth in turnover over the same period and had no long
term liabilities. Uchumi was so liquid that excess funds had been invested in treasury
bills. Detecting trouble, the Board of directors appointed a new Managing Director who
started a major house cleaning through cost cutting, hiring of new managers, sprucing up
the brand image and launching of new products. Uchumi embarked on major national and
regional expansion strategy that would cost Kshs. 2.5 billion (US $ 32 million) in five
years and spent Kshs. 400 million (US $5 million) on capital expenditures such as an
inter-branch information technology network. The new managing director’s turnaround
strategy was to invest the excess funds in the company’s core business instead of the

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money market. The expansion strategy did not pay off as expected. A spate of spiraling
costs emanating from expansion, coupled with sluggish sales growth against a backdrop
of a declining revenue growth sank the company deep into debts and deferred dividend
payouts.

Though PriceWaterhouseCoopers warned of Uchumi’s precarious financial situation

without qualifying its opinion, in its 2004 report. In retrospect, Uchumi's downward slide
began in the year 2000 following the departure of long-serving chief executive Suresh
Shah. Clearly, part of the problem arose from the fact that the new group that came to
steer the company under the management of Kennedy Thairu and chairmanship of Chris
Kirubi engaged top managers at very high salaries.

A low-margin operation had been saddled with salaries comparable to what was being
earned by managers in high-margin sectors. According to the accounts of 2001, net
operating costs rose from Ksh961 million ($12.9 million) in 2000 to to Ksh1.2 billion
($16.2 million) in the following year.

That figure was to increase gradually to Ksh1.3 billion ($17.5 million) in 2002.
Perhaps the greatest mistake made by the group was the massive expansion programe that
saw Uchumi grow from 19 branches in 2000 to 28 branches in 2004. Similarly, the floor
space increased from 315,000 square feet to 577,000 square feet during the same period.

The expansion programme resulted in approximately Ksh1.6 billion being invested in

building new stores. From then on, the company did not recover from the downward
trend. In 2003, it incurred a Ksh175 million pre-tax loss. The losses were to continue in
the subsequent years - Ksh622 million in 2003 and Ksh604 in 2004. Consequently, on
31st May 2006, the Board of Directors resolved that the Company ceases operations and
on 2nd June 2006, the Debenture Holders placed the Company under receivership.
Simultaneously, the Capital Markets Authority (CMA) suspended the Company’s listing
on the Nairobi Securities Exchange (NSE).

Following a framework agreement between the Government of Kenya, suppliers and

debenture holders, the company was revived and commenced operations from 15th July,
2006 under Specialized Receiver Manager (SRM) and interim management.

The management and staff have since worked tirelessly to redeem the company. From a
negative bottom line in 2006, the company reported profits in the last three financial
years to 2010. The lending banks in turn lifted the company’s receivership in 2010 and
the company was successfully re-listed in the Nairobi Securities Exchange on 31st May
2011 – exactly five years to the date that it was suspended. In 2012, the board of directors
resolved to have the company make a rights issue which was done until 2014. The
purpose was to raise funds to meet working capital requirements necessitated by the
planned opening of new branches in the region as well as to refurbish and mordenise
some of the existing stores. In 2014, Uchumi issued the rights issue. In 2015, a profit
warning was issued and the retailer also closed two of its branches in Meru and

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Syokimau. In March 2016, Uchumi exited Uganda and Tanzania markets due to the huge
losses being recorded in the past five years. Operating costs accounted for 25% of the
retailer’s total cost while it only accounted for 2.5% of its operations in the two countries.
Therefore, a decision was made to exit since doing business in these markets was not
economical. Uchumi has also closed Taj Mall branch in Nairobi alongside its outlets in
Eldoret, Kisii, Nakuru and Embu.

Ownership structure

Percentage of
Shareholder
shareholding
Jamii Bora Bank 15.8
Kenya's Ministry of Trade 14.6
Paul Wanderi Ndung’u 5.4
KWAL Holdings 4.3
Equity Nominees 4.1
Karim Jamal 2.4
Others via the Stock Exchanges in eastern Africa 53.4
Total 100

Leadership background

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Uchumi supermarket has had a mixed leadership background. The most recent ones are
critical in evaluating current situation

Mr. Titus Mugo

Mr Mugo joined Uchumi in 1982 as a supervisor after a stint with Simlaw Seeds and
Amu Motors. “I was determined to go up the ladder to the senior most position in the
company, chairman of Uchumi.” At Uchumi, he was to come under the wings of a no-
nonsense manager Suresh for a training he only simply describes as ‘excellent.’ No
wonder, Mugo speaks a host of Kenyan languages and is fluent in others like Gujarat,
Punjabi and Hindu.

Born in 1960 in Kirinyaga to a struggling family of nine, a determined Mugo was to

literally drag his chin off the floor, rising through the ranks to become the purchasing
manager and later the first marketing manager of Uchumi. He was ahead of time in his
marketing prowess. “I came up with such slogans like ‘Shop and win’ and the’ Greatest
sale’. In fact, I am the first person to give away the first Mercedes Benz as a present
through a promotion in this country in 1995 during a raffle in the ‘Shop and win’
competition. We increased our sales six times,” relives Mugo.

Young and very aggressive, Mugo could not let opportunities pass and when the position
of general manager was advertised in 1994, he gave it a try. “Propped up by successful
sales promotions that I had carried out resulting in all Uchumi outlets getting
packed to capacity, I applied and competitively selected.” Unfortunately, his age was to
prove an Achilles heel. “Upon being selected, I was told that I was too young for the
job.” The Uchumi management contacted the British Council for a scholarship and with
that Mugo, 34 years then, was sent into a commercial exile in the UK to learn more about
retail trade management. He was attached to the biggest supermarket chain then, J
Sainsbury’s. After a six month stint and regular shuffling between Kenya and UK for
three years, the management seemed not convinced that he was old enough for the job.

Even more, the management was not aware that by now Mugo viewed Uchumi’s outlets
as too small for him and embarked on a major challenge. As if to add insult to the injury,
his mind was totally changed and he could not imagine of operating small
supermarkets. “I came up with the hyper concept and made a proposal to the board for
approval. Nobody could imagine that I could start a hyper that could serve over 5000
people in a day and generate Ksh 100 million in a month.” Met with skepticism, Mugo,
who had a Bachelor of Business Administration (BBA) degree from the UK, bet his job
with the board over the concept. “I bet that if it succeeded, they immediately appoint me
a general manager but if it fails, they sack me. Apparently viewing this as a solution to
the ‘Mugo problem’, they approved the proposal. They were almost certain the project
will fail. I started with Ngong’ Hyper.” On its first day of operation, Mugo says, it was all
chaos at Ngong’ Hyper and they had to hire policemen to control the crowd of customers.
The board was left with no alternative but to make good their bet, they made Mugo
Uchumi general manager in 1996. Under his watch, new branches were opened at

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Nairobi’s Sarit Centre and Eldoret, among other outlets. “I maintained a good rapport
with the suppliers, a fact that saw our outlets, including the hyper markets packed with
goods.” Then the momentous time for Mugo was to dawn on him in 1999 as his mentor
and boss Suresh decided to ‘retire’. “It was the biggest challenge I have ever faced.
Uchumi was seen as an Asian-run company and Asians were known to be serious
businesspeople. Yet here I was, not only succeeding an Asian, but also a successful
manager at that. With a history of many Africans running down companies, I had no
option but to succeed.”

Fortunately, Suresh was to be at Mugo’s disposal for consultation. “It was Suresh’s idea
that it was time Uchumi created an African manager who could show the world that
Africans can run businesses. As the first African Uchumi MD, I hit the ground running. I
increased sales by 34 per cent and recorded Ksh 500 million as profit. By all standards, I
proved to the world that I could make it.”

Mugo’s aggressiveness saw him become one of the youngest successful chief executive
officers (CEOs) then, earning him the coveted seat of chairman of the Nairobi chapter of
Young Presidents Organisation with offices in Dallas, United States. Mugo was the only
African representative in the forum. The forum constitutes of CEOs that have succeeded
and are below 44 years with a turn over of minimum of Ksh 560 million ($ 8 million).
“I am still a member. Now that I am getting older, I am eyeing the World Presidents
Organisation (WPO) for older CEOs.” As fate could have it, the then Uchumi board led
by Chris Kirubi, were of the idea that Mugo was old school. “When I presented my report
to the board on 20th October 2000, I got a simple reply, ‘there is no corporate
governance in this company’. I was humbly requested to step down as Uchumi MD. I
was actually sacked,” Mugo reminisces.

Mr Kennedy Thairu

Mr Kennedy Thairu joined Uchumi supermarkets after a very successful career with
unilever group. He replaced Mr Mugo as the MD under controversial circumstances. A
very trusted confidant of the chairman Mr Cris kirubi, Thairu joined Uchumi with the
backdrop of expansion strategy. A very optimistic man Mr thairu could cajole
shareholder into believing the future is good even in thewake of rising losses. He is
reputed to have the famous statement, ‘ The way forward is only up, this is the lowest we
can possibly be. The was in response to shareholders challenge on what he was doing
about the losses.
:
Thairu’s tenure saw the chain undertake a restructuring programme that many had
anticipated after a report compiled by a leading audit firm, Price Waterhouse Coopers,
PWC highlighted inefficiencies in the company’s operations. The same period also saw
the chain expand to new locations and divest from property ownership. It was not
immediately clear who would replace Thairu, but indications are that the Board would be
headhunting ahead of his departure at the end of this month. The company assured
investors that the reforms started by Thairu and endorsed by the Board would continue.

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Uchumi Supermarkets managing director Kennedy Thairu left the company at the end of
his three year contract which expired at the end of june 2004. According to press
statement issued from the company’s head office, Thairu’s departure which was ratified
by the Board following a meeting at the company’s head offices.

Mr Chris Kirubi

Chris Kirubi is undoubtedly one of the richest Kenyan billionares. He did not inherit his
fortune though. During the coffee boom 1975/1976 when many Kenyans made millions
smuggling coffee from chaotic Uganda at a time when Brazilian coffee had been heavily
hit by frost thus pushing world coffee prices to an all time high, Chris Kirubi was a mere
employee of a parastatal transport company known as Kenatco.

Without making any wild allegations, before the coffee boom Mr Kirubu was a penniless
ordinary employee of Kenatco. After the coffee boom, he emerged an extremely wealthy
man. He used his connections and friendships made during the coffee boom to clean up
and enhance his image. Foreign companies coming into Kenya looking to appoint a
director with their ear to the ground and good reliable powerful contacts had turned to
Chris Kirubi in increasing numbers and in no time at all he was "Mr Clean". Meanwhile
this shrewd unschooled man picked up all he could from the many boardroom
appearances he made, the rest as they say is history and today he is one of the wealthiest
and most powerful men in the land.

Mr Kirubi a natural Bon Viveur, and ardent golf playing is one of the more colourful
personalities in Kenyan executive circles, and is famed for a spontaneous and humorous
demeanour at cocktail functions. In Kenyan business circles, Mr Kirubi needs little
introduction, a prominent business executive with interests in activities as diverse as
property management, insurance, courier services as well as manufacturing and
investment funds, his uninhibited personality can be a welcome change from the dour
executive business world of his contemporaries.

A former chairman of the Kenya Association of Manufacturers, Mr Kirubi is notably

reserved about the details of his early childhood and education, but accepts the tag of his
being a 'rags to riches' life. His concedes that his formal education was the benefit of
generous donations as his own family background was very poor, but he believes his
success is due to a singular focus on hard work and continuos aiming for the top.

After formative years in employment with Kenatco, CMC, Sterling Winthrop and Shell
he ventured into private business in the early seventies. He believes that working for
those diverse firms gave him a broad business perspective that has served him well in his
disparate business activities today.

Purchasing the prestigious International House was his first major business coup having
been a tenant in an 800 square foot corner of the same building just five years prior. This

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ability to make the right decision while at the right place and at the right time is what he
describes as his founding strength.

Indeed his Haco industries flagship company grew out of a partnership with a Dutch
consortium that was divesting from Kenya. What started as a small outfit with less than
50 employees has grown into a company with annual turnover in excess of Ksh 1billion
and over 500 employees. He also has major shareholdings in DHL, Bayer East Africa,
Sandvik East Africa, UAP Provincial Insurance, Jardine Alexander Forbes Insurance and
ICDCI where he is the chairman and primary investor.

Through ICDCI, he is a director and major shareholder in Uchumi Supermarkets and

Nairobi Bottlers.

His guiding principles? He has never been averse to delegating to good managers despite
his hands-on approach. He uses headhunting agencies to identify young dynamic and
motivated managers who demonstrate a keen ability to learn and unlike many of his
indigenous contemporaries, is not afraid to hire Asians, Europeans as well as other
Africans and Kenyans of any tribe.

He believes in sharing his successes with his staff, managers and co-investors; but is
famously intolerant of insubordination, dishonesty and inefficiency. He avidly follows
new technologies and regular management updates and studiously follows new trends
and thinking. His business management studies at the INSEAD institute in France,
Handles university in Sweden and Harvard Business school in Boston show his keenness
to attain experiences from as diverse places as possible.

He is proud of his reputation as a professional manager with a clear distinction between

his business and personal lives and relates well with his partners and co-investors who
share his focus.

He is particularly proud of his involvement in ICDC investments that he entered slightly

over two years ago to the surprise of many corporate investors who had long shunned this
perennial under-achiever. Since his involvement, its share value has climbed from around
Ksh23/= per share to the current Ksh50/= plus levels. His ambitions for the company are
no less conservative, as he seeks to enhance investments outside Kenya's poorly
performing borders.

While this may seem at odds with his 'buy Kenyan build Kenya' mantra, it underlies his
keen sense of business pragmatism. Indeed close to half of the sales of Haco industries
are to the export market, principally to the COMESA region, but he intends to pursue the
US market vigorously, particularly through the AGOA initiative. It has not all been a bed
of roses as he has had business failures and collapsed joint ventures such as King
International. These for him however, have been of great instructive value rather than
episodes to rue.

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Mr. Chris Kirubi is a prominent Kenyan business executive who has invested heavily in a
number of Kenyan companies and multinationals. He has extensive interests in property
management, insurance, courier services, advertising, manufacturing, investment funds
and in the media. He is an alumnus of INSEAD institute in France, Handles University in
Sweden and Harvard Business School in Boston, USA. He was recently appointed by the
President of the Republic of Kenya as a member of the National Economic and Social
Council to advise the President in matters relating to economic and social development in
Kenya.

He is Chairman of the Board of the following companies: DHL Worldwide Express

Kenya Limited, Haco Industries, International House Limited, Sandvik East Africa,
Kiruma International, Nairobi Bottlers, and the Capital Group. Mr. Kirubi is also a Board
Member of ICDC Investment Company, UAP Insurance, United Assurance Company
(Uganda) and Beverage Services Kenya. Apart from business, Mr. Kirubi is deeply
involved in a number of social and economic activities.

His contributions are evident not only in the economy but in the society where as a
concerned citizen he has been a champion for positive change in a number of areas. He
has been very active on issues pertaining to HIV/AIDs. He is a member of the Global
Business Coalition on HIV/AIDs Corporate Advisory Board, based in New York.

He is also the Chairman of the Private Sector HIV/AIDs Business Council. As a result of
Mr. Kirubi’s numerous contributions to the Republic of Kenya, he was awarded the Elder
Of The Burning Spear in 1999 by the President of the Republic of Kenya In 2004, he was
decorated with the National Order of Merit medal by the French Government.

Mr Jonathan Ciano

He was appointed in 2006 as Uchumi’s Receivership Specialised Manager (RSM). Mr

Ciano worked very hard to turn around Uchumi and in 2008 the retailer made profits. The
strategic recovery initiated in 2007 was predated on growing customer base, increasing
sales, reorganizing the business operations, cutting on costs and recapitalising. In 2006,
Uchumi obtained a loan from the government. Uchumi was responding positively to the
business reorganization with customer numbers hitting 16.2 million for the full year
which ended in June 2009 and more than half of the bank debt— Sh500 million —settled.
Under his management in 201, Uchumi was relisted in the Nairobi Securities Exchange.
In 2011, Ciano was appointed as Uchumi’s CEO, which he served until June 2015 when
he was fired due to gross misconduct. He had made himself as Uchumi’s top fresh
produce supplier which he would pay himself before the other suppliers. In 2014,
Uchumi issued a rights issue and none of the funds can accounted for according to
Kipngetich, the new CEO. During Ciano’s leadership, Uchumi expanded by opening new
branches in 2012. In 2013, Uchumi manipulated its financial statements to report a profit
of Ksh 357 million while indeed it was an actual loss of Ksh 123 Million. The same
happened in 2014 where the store recorded a loss of Ksh 336 million yet the officials said
there was a profit of Ksh 384 million made during that period. Uchumi was making
losses mainly due to flawed tendering processes. It was identified that the biggest

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downfall of the chain was a cartel of senior managers who had formed companies that
would supply Uchumi with the goods that it stocks on its shelves at a higher price. Mr
Ciano left Uchumi in June 2015 when it was already highly indebted and in huge
financial losses.

Mr Julius Kipng’etich

He took over from Mr. Jonathan Ciano who left the company in June 2015. Before
joining Uchumi, he had worked In Equity Bank as the Chief Operations Officer and
Kenya Wildlife Service (KWS) as the CEO. In KWS where he worked for eight years, he
turned around the institution from a loss making to a profitable one. He joined Uchumi in
September 2015 and after investigations it was revealed the way the financial statements
were manipulated in the years 2013 and 2014 to report profits instead of losses. Mr Julius
has also set the turnaround strategy that he will apply to transform Uchumi. These
include the conversion of Ksh 1.8 Billion creditors to Equity and sacking 1,977
temporary and permanent workers from its regional subsidiaries or 55 per cent of its
workforce. The company has remained with 1,740 employees. It has also reduced the
payroll expenses from Kshs 100 million to Ksh 41 million. Uchumi has also closed the
non-profitable branches and exited the Uganda and Tanzania markets.

In summary, Uchumi’s three point Turnaround strategy include: Stabilization-Under this

strategy, Uchumi plans to focus on only the profitable and manageable stores. As earlier
discussed, Uchumi closed all the regional stores in Tanzania and Uganda in order to
concentrate on its kenyan business; Optimization -The primary objective of this second
phase is restocking the stores with a pilot store being Uchumi Koinange Street, which is
now fully stocked; Growth Phase- Uchumi has defined its niche, the mass market. The
defined niche will enable the retailer reposition its strategy definitively, and compete with
the right peers in the Kenyan market.

Achievements of Mr Julius Kipngetich

 The new management negotiated a bank overdraft from Kenya Commercial Bank
in order to improve the retailers liquidity.
 On September 15th new management cleared a KES 500M debt owed to its
suppliers
 On September 16th,Uchumi renewed its bill payments service with Kenya
Power four months after suspending the partnership over what it claimed were
delays in remitting cash paid in by electricity users.
 Uchumi has also put on sale their three properties on Langata road, Ngong road
and Kasarani saying that they are not viable.

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Chairman resignation.

On Tuesday, July 20, 2004, the wannabe FM radio disco jockey and billionaire, Chris
Kirubi resigned as the chairman of the board of Uchumi Supermarkets.
For all the faults that the self-styled DJ CK may suffer, he must earn credit for admitting
that the board that he chaired did not serve the shareholders of Uchumi well and it should
resign and pave way for new talent. Kirubi’s exit from Uchumi presents a major
advantage to the chain’s 6,000 shareholders – including shareholder number four:
himself. In a resignation letter last week, and in conversation the same week, he heaped
all the blame on the management of Uchumi whose firing he engineered, and whom he
does not have kind words to describe, and board members. On FM radio he was quoted
saying that he does not like to be associated with failure. This is trademark Kirubi,
according to his fellow directors at Uchumi, and those close to him.

He invested heavily to accumulate a fortune in Uchumi and its second biggest

shareholding company (ICDC Investment), over-invested his reputation in his
management capability in guiding the chain and its management. Now, when a lot of
trouble emerges in the Kingdom, he turned his back on his shareholders without
apologizing. Kirubi’s diagnosis of the cause of the financial problems at Uchumi boils
down to this: the management was inexperienced, and the board was out of depth with
the complexities of the retail business.

"We [the board] did not know the questions to ask, and when we asked the questions, we
did not get the answers," says Kirubi. Or at least got half -truths.

The board did not exercise diligence in assessing the actions of the managing directors,
especially when resolving the main problems that have caused trouble to the company as
well as seek independent second opinion on these issues. However, the fact that its
management and its board failed Uchumi is now water under the bridge. The question
that remains is what can be done to turn the supermarket around. Several proposals have
been presented, starting with the Sh160 million shareholders loan.
In the face of the said crisis, the former chairman, Mr Chris Kirubi — who is also the
single biggest shareholder besides the government — went political, blaming other
people before resigning.

Kirubi is a substantial shareholder in Uchumi. It is also a well-known fact that he is a

substantial owner of, among other companies, Haco Industries, a major supplier of goods
to Uchumi. It was during the watch of Kirubi that Uchumi engaged in an expansion
spree, which turned out to have lacked economic foresight and prudence. Together with
the physical expansion, was the computerisation that proceeded in tandem. Amid all
these, the cries and plight of the employees were ignored.

After many months of spin, the truth about the financial health of Uchumi Supermarkets
chain is finally starting to filter out. For those who have had a closer look at the number,
the situation is not pretty at all. According to a report prepared by analysts at ICDC
Investment at the request of the board for presentation to Trade Minister, Mukhisa Kituyi

12
– the government is shareholder number one – Uchumi is expected to lose Sh470 million
before tax in the financial year that ended on June 30, 2004. Suppliers are owed Sh1.8
billion and the banks are in the hole to the tune of Sh1.2 billion. Basically, Uchumi has
been reduced to a basket case and needs an immediate cash injection. First Sh160 million
—half of which ICDC Investment is willing to give and the rest the board is calling on
the government to provide.

The government does not have to give hard cold cash, but it is required to give a
guarantee backed by taxpayers’ money to assure the banks. This Sh160 million will be
used to repay a loan from Citibank that has been called in.

Already, a special briefing paper has been prepared for consideration— hopefully— at
the Cabinet meeting this week.However, even as the shareholders ponder the heady stuff
of how to get the company back on its feet, nothing illustrates the mess at Uchumi than
the fact that its employees have since 1998 shoplifted –stolen – goods worth over Sh1
billion from the stores and warehouses. Over Sh700 million of these goods have been
stolen since 2001. I choose to use the word steal deliberately. This is because the retail
trade has a politically correct term that it uses to call petty thievery and shoplifting by its
employees. They call it shrinkage.

The cost of shrinkage at Uchumi since 2001 is greater than the capitalisation of the
company and the cost in 2004 is more than 60 per cent of its capital as at March 2004.
Kirubi says that the management could not explain why the shrinkage was so high. But
how would anyone explain why employees would choose to shoplift more than 1,000
photocopies (Sh1billion as Kamlesh Pattni of the Goldenberg infamy would choose to
call it) from their employer. The answer is simply motivation.
The employees of Uchumi came to hate their employer from 2001 when their overtime
was cut and Kennedy Thairu, the managing director who was fired a few weeks ago,
scrapped their Christmas bonuses. Because the employees hated their company so much,
they would connive among themselves and with customers to turn a blind eye as their
colleagues shoplifted. This way, they could boost their income. They also connived with
suppliers to cheat their employers. Since the management was not hands-on, no one knew
what was going on.

Insider trading

After showing Kennedy Thairu the door, fingers started to point at the performance of
the Uchumi Supermarkets’ board. The board’s agenda over the next months will be hiring
a new CEO, beefing up senior management and the recapitalization of Uchumi. But there
is one question that cannot be avoided, how well has this board performed over the years.

Granted, Uchumi today has one of the best policy documents on how its board is
supposed to be appointed and managed. It also has talented individuals like Isaac

13
Awuondo (an independent non-executive director) and Tony Wainaina (an alternate
director representing ICDC Investment).

However, there are major issues that have been raising eyebrows with shareholders.

The first issue is the question of conflict of interest posed by the presence of big
shareholders and suppliers with seats on the board. The second issue is the talent pool in
the board. Is the current board as constituted suitable for running a company the size of
Uchumi with all its complexity?

The composition of Uchumi’s board presents a big problem with issues of conflict of
interest. This is because it is dominated by shareholders and suppliers who between them
own more than half of the shares either as individuals or associate companies. Yet this is
a public company. Here we have in mind Chris Kirubi, who is the chairman of the
Uchumi and until recently, ICDC Investment, which owns 24.9 per cent of Uchumi.
Kirubi remains the most powerful shareholder. Then there is the Kenya Wines Agency,
which is the second biggest shareholder in Uchumi and an associate company of ICDC
Investment.

On the other hand, ICDC Investment owns a very big stake in Coca Cola’s bottling
businesses in Kenya. By the very nature of these cross-shareholdings, Uchumi is doing
hundred millions of businesses with a few shareholders. Though the companies can claim
that Uchumi’s pricing strategy is above board and transparent, this does not eliminate the
conflict of interest.

Indeed, it is possible that the individuals in this board get to approve the budgets of the
suppliers and this gives their companies unfair advantage. It is common practice today,
for the sake of good corporate governance, that companies like Uchumi should tread
carefully when it comes to appointing shareholders—who are also suppliers--as director.
The company should also pay close attention to the talent pool in its board. The fact that
problems with computerization and capitalisation of the company were allowed to linger
for that long points to a situation where the board either failed to take the right decisions
early enough or was not in the know (which is very unlikely.)

Restructuring
The intensive restructuring programme entails, among other things, the search for a
strategic partner. The partner is expected to bring in retail chain management experience
in addition to raising fresh equity to the tune of Sh1.2 billion. Despite the huge losses,
analysts said Uchumi’s growth projections should be looked at in the long-term. "They
need somebody who will drive the change process forward. Right now, they do not have
a competitive advantage over their rivals," Edward Gitahi, a Financial Analyst with AIG
Global said.

Gitahi gave a compelling case for restructuring of the retail chain saying that the losses
were expected. "The problems at Uchumi should also be looked at in the context of rising
insecurity, declining consumer confidence and a general decline in the economy," he

14
said. He, however, urged the chain should move with speed in getting rid of the 25 per
cent equity "to an investor who has the required experience. The group’s gross turnover
in the year under review declined by 11 per cent to Sh8.937 billion from Sh9.9 billion
realised in the previous year.

Even though the turnover is better than 2002 at Sh8.765 billion, the firm attributes the
drop in sales to a reduction in customer numbers, partly due to a stock out that occurred
in June 2004." "The board and management have addressed this situation and regular
supplies have resumed to all branches," Bett said. "Out of this effort most Uchumi
branches have now recorded an improvement in customer numbers," he said. Operating
costs increased by 13 per cent to Sh2 billion from Sh1.77 billion.
Bett said the operating costs have a non-recurring component of Sh100 million incurred
in the re-organisation programme. "In addition, management has put in place cost-cutting
measures that are expected to save another Sh170 million in current year," Bett said. Bett
pointed out that despite going through one of the roughest patches of its lifespan, Uchumi
realised savings "in the three months of the current financial year."

Financial analysts at the Nairobi Stock Exchange have projected brighter prospects for
the retail chain as most of its essential, non-recurring costs such as re-evaluation of
assets, streamlining of its supply chain process, derocgnition of deferred tax and the costs
of the staff redundancy exercise early in the year have been reflected in its books.
Bett outlined the firms restructuring plans that will see the chain raise new equity in
addition to ongoing business restructuring. ‘The past couple of months have seen us
tackle the illiquidity issue by infusion of some bridging finances to normalize our
operations as we seek to restructure our debts. This has assisted in paying for critical
supplies leading to an improvement in stocking levels, which in turn has released some
cash into the business” he said. “We have also been able to pay off some of the debts
owed to our bankers. A good example is the amount owed to Citibank. We are also well
within our payment schedule for our long term loan from our principal bankers, KCB” he
added.

The next phase will see the chain seek injection of fresh equity from its existing and new
shareholders. The exercise, upon approval by existing shareholders and the regulatory
bodies – CMA and NSE, will see an injection of upto Ksh 1.25 billion in equity. The
injection of equity will accompany an ongoing business restructuring which has seen the
chain strengthen its buying, retail operation, distribution chain, customer service and
improved supplier relationship.

In addition, the chain is envisaging an organic growth in its regional business. Its Uganda
operation has recorded a good performance since opening its doors in late 2001. The
Kampala branch recorded an increase of 153% growth in turnover in the same financial
period

For long, it was whispered that Uchumi Supermarkets was going through lean times.
Finally, it came to pass. A plethora of reasons has been advanced for the bad times that
have befallen the retail giant, ranging from a rapid expansion programme to its
computerisation project to theft by employees.
15
The issue at the country's biggest supermarket chain is not the imperative for new shops,
but the financing strategy employed in the cash-sucking exercise.
The whole truth about Uchumi's Great Expansion is that they were onto a good thing.
They only seem to have gone about it in the wrong way, perhaps emboldened by what
they were seeing in the till every evening.

If, as the firm says, the pay-back period for a new supermarket in Kenya is three years,
Uchumi should have shopped around for debt instruments with the same maturity profile.
The figures tell an eerie, ominous story. In one year, Uchumi's finance costs (read interest
charges) has shot up from Sh3 million to Sh78 million! Current ratio, which measures
indebtedness is at 56 per cent, while current liabilities outlast current assets by as much as
Sh1.1 billion.

In addition to the possibility of a raising the badly needed sh 1.2 billions, the auditors
warned that Uchumi’s continued survival was dependent on raising a further Sh600
million from the sale of surplus assets, obtaining Sh500 million long-term loan and being
able to borrow Sh200 million for a short-term by June 2008. None of these facilities had
been negotiated by then. During the 2013/14 financial year, 8 new branches opened in
green sites, that is – Mombasa Moi Avenue branch-October 2013, Juja branch-Dec 2013,
Mbale (Eastern Uganda)-Jan 2014, Kisumu and Maua branch- March 2014, Segerea in
Dar es Salaam-April 2014 Makumbusho in Dar es Salaam in May 2014 and Shekilango -
June 2014. By the close of the financial year 2013/14, our total branch network stood at
37, that is, 27 in Kenya, 4 in Tanzania and 6 in Uganda.

The Uchumi Group has continued to record growth and profits for the eighth consecutive
year since reopening. The economic and social environments were negatively impacted
by challenges like the Euro debt crisis, general elections
(effect in Uganda and Kenya), freezing of public spending and effect of devolution in
Kenya, high cost of living and borrowing affecting infrastructural development and
customer propensity to spend among others. Total Group sales registered a marginal
growth of 1% mainly due to the drop during the year in the Uganda subsidiary by 12%
mainly attributed to competition, supply chain challenges and some locations becoming
untenable due to infrastructural and tenancy mix challenges which may lead to our
divestiture and relocation to already identified more promising locations in the coming
financial year. Tanzania sales on the other hand grew by 10% versus prior year while
Kenya registered a 2% growth in sales. Gross profits grew by 2% from Kshs.2.77 billion
in 2012/13 to Kshs 2.81 billion in 2013/14 as a result of initiatives aimed at maximization
of trading margins. Annual customer numbers increased by 13% in 2013/14 relative to
2013/14. Operating costs also grew in line with operations as well as a result of runaway
inflation. Finance costs increased to Kshs 64 million from Kshs 16 million as a result of
new loan facilities in the year from ICDC and KCB. Consequently, the Group net profits
before tax came down by 6.8% from Kshs 486 million in 2012/13 to Kshs 453 million in
2013/14 mainly attributed to inordinate losses in the Uganda subsidiary due to the
challenges mentioned above, and the effect of investment in new branches in Kenya and

16
Tanzania, which are yet to mature. The statement of financial position grew by 24% (or
Kshs.1,311 Million), from Kshs.5,574 Million in 2012/13 to Kshs. 6,885 Million in the
year 2013/14.The Government of Kenya loan advanced during Receivership for purposes
of reviving Uchumi in 2006 was fully settled upon paying the last installment of Kshs. 31
million on 30th June 2014.

From the year 2008, Uchumi started making profits and in 2011 it was relisted in the
NSE. It was until 2013 when the Group reported a loss of 246 million. The Group also
reported a consolidated loss of Kshs 1.018 billion as at 31st December 2015. This loss is
attributed to a drop in sales due to low stock levels as we rebuild supplier confidence
eroded in the past years and the closure of Uganda and Tanzania operations, along with
two non-viable branches in Kenya. Operating expenses grew by 12% following
rationalization of 1,200 staff and costs related to implementation of Collective Bargaining
Agreement. The Board and Management continue the pursuit of strategies aimed at
stabilizing the company's performance namely the sale of non-core assets, sourcing for a
financial investor, building supplier confidence and enriching customer experience at our
stores.

Kenyan Retail Industry

Kenya has been ranked as having the second most developed retail sector in Africa as
increased urbanisation fuels investment of billions of shillings worth of modern shopping
malls. According to London-based consultancy Oxford Business Group, Kenya is second
to South Africa and doubles Nigeria, Africa’s largest economy, in the level of
development of its formal retail shopping system. “2015 saw a near tripling of Nairobi’s
modern retail space, with close to 170,000 square metres of new leasable area coming on-
line,” reads the report in part. “In comparison to other African markets, Kenya’s formal
retail penetration rate, which ranges from 30 per cent to 40 per cent, is the second highest
in Sub-Saharan Africa and this places the country at roughly half the level of South
Africa, where formal retail is estimated to stand at 60 per cent of overall activity, but
twice that of Nigeria.”

Kenya’s domestic formal supermarket segment, which includes a number of formidable

local firms that maintain an important regional presence, most notably Nakumatt, Tuskys,
Naivas and Uchumi, has expanded significantly since 2012. Several small retailers
including Mulleys & Sons, GreenMart, QuickMart, Maathai Supermarket, EastMatt and
CleanShelf are in the midst of ongoing expansions, while a new international entrant –
Botswana’s Choppies – announced plans for a $10m acquisition of 10 Ukwala
Supermarket outlets in May of 2015.

Although the supermarket segment remains dominated by larger local players, Choppies
is the third international retailer to join the Kenyan market in recent years. In September
2014, France’s Carrefour announced plans to enter the market with two new stores at The
Hub Karen and the Two Rivers mall development. Meanwhile, South Africa’s Massmart,
which is 51% owned by the American retail giant Walmart, failed in its bid to acquire the
family-owned Naivas chain in April 2014 and subsequently opted to open a flagship
Game store in Nairobi in May 2015, which sells groceries, electronics and other assorted

17
goods. A $7m investment, Game has sensibly partnered with a number of local suppliers
in a bid to cater to local consumer preferences.

Uchumi is the fourth largest supermarket in Kenya after Nakumatt, Tuskys and Naivas.
Although Uchumi had started expanding in 2012 by opening new branches, currently it is
closing down the outlets that are no longer profitable. For example, in 2015 it closed
down the Syokimau and Meru branches. In 2016, it has closed the Taj Mall branch in
Nairobi alongside its outlets in Eldoret, Kisii, Nakuru and Embu. The name ‘Uchumi’,
which is Swahili for economy, has a very strong retail heritage.

Macro-Economic Background

The government appears committed to extensive reforms with the aim of reviving
Kenya’s economy. Economic policy will be guided by the country’s poverty reduction
and growth facility (PRGF) programme with the IMF. Ongoing corruption and weak
public-spending management have caused delays in the disbursement of budgetary
support, although in late 2004 the IMF endorsed progress to date and disbursed fresh
loans while project funding continues to climb.

According to the Economic Survey, 2004 the real GDP grew by 4.0 per cent under the
new System of National Accounts (SNA) measurement method adopted by the Ministry
of Planning & National Development. This is the highest growth rate since 1996 when
the economy grew by 4.6 per cent. Real GDP growth is forecast to accelerate to 5.0% in
2005 and 6.0% in 2006, owing to the ongoing pick-up in the disbursement of donor funds
and strong performance by cash crops and tourism. The current-account deficit is forecast
to narrow to 3.3% of GDP in 2005 and 2.6% of GDP in 2006 as exports, tourism and
transport earnings are expected to post solid increases.

Economic Outlook

The retail industry has shown no sign of losing momentum, with rising demand among an
increasingly wealthy consumer class expected to maintain sector resilience in the face of
any near-term economic slowdown. While retailers do face some substantial challenges
from currency depreciation and taxes, positive growth will continue to present
stakeholders with a wide array of retail opportunities, formal supermarkets and in e-
commerce, and investment should continue to enjoy healthy growth trends and rise in
2016.

World real Gross Domestic Product (GDP) growth decelerated to 3.1 per cent in 2015
from 3.4 per cent in 2014. World current account balance as a percentage of GDP stood
at 0.3 per cent in 2015 relative to 0.4 per cent in 2014. Global inflation rate eased from
3.5 per cent in 2014 to 3.3 per cent in 2015 as a result of decline in international oil and
other commodity prices. Total global unemployment stood at 197.1 million in 2015. The
world merchandise trade volume grew by 3.2 per cent. The advanced economies
experienced a modest economic recovery, mainly driven by stronger domestic demand as
labour markets and credit conditions improved. The Gross Domestic Product (GDP) grew

18
by 5.6 per cent in 2015 compared to 5.3 per cent growth in 2014. This expansion was as a
result of significant growth in some key sectors among them agriculture; construction;
real estate; and financial and insurance. However, growths in mining and quarrying;
information and communication; and wholesale and retail trade decelerated during the
same period. Accommodation and food services were the only sector whose growth
contracted by 1.3 per cent which was however an improvement from the previous year
decline of 16.7 per cent.

Key macroeconomic indicators remained relatively stable during the review period.
Overall, inflation eased from 6.9 per cent in 2014 to 6.6 per cent in 2015 due to lower
energy and transport prices. The current account deficit as a percentage of GDP narrowed
from 14.5 per cent in 2014 to 11.4 per cent in 2015. This was due to a substantial growth
in export of goods and services and a reduction in the import bill. The Kenyan Shilling
depreciated against its major trading currencies during the review period but appreciated
against the Euro, South Africa Rand and the Japanese Yen, respectively. Despite the
monetary authorities adjusting the Central Bank rate (CBR), the weighted average
interest rates on commercial banks loans and advances rose by 1.40 percentage points to
17.45 per cent in December 2015 compared to a rise of 15.99 per cent in December 2014.
The volume of stocks traded at the Nairobi Securities Exchange (NSE) declined
significantly from a high of 5,346 points in the first quarter of 2015 to 4,040 points in
December 2015.

The Gross Domestic Product (GDP) is estimated to have expanded by 5.6 per cent in
2015 which was a slight improvement compared to a 5.3 per cent growth in 2014. This
growth was mainly supported by a stable macroeconomic environment and improvement
in outputs of agriculture; construction; finance and insurance and real estate. However,
growth slowed in a number of sectors including; information and communication, mining
and quarrying, and wholesale and retail trade. Similarly, growth in taxes on products
slowed during the review period. The growth of accommodation and food services
contracted by 1.3 per cent, a less severe performance compared to a revised decline of
16.7 per cent in 2014.

The growth in agriculture was mainly supported by improved weather condition that
resulted in significant increases in output of maize, horticultural produce and livestock.
However, heavy rains in 2015 were unfavorable to cultivation of some crops like potatoes
and tomatoes. Nevertheless the significance of crops that were favoured by the weather
far outweighed that of crops negatively impacted upon, resulting in an impressive growth
of 5.6 per cent in the agriculture sector.

Construction recorded the fastest growth of 13.6 per cent in 2015 compared to 13.1 per
cent in 2014. Growth in construction activities was mainly driven by the ongoing public
infrastructure development coupled with the resilient private sector’s expansion in the
real estate sector. The financial and insurance sector maintained a robust expansion to
grow at 8.7 per cent in 2015 from 8.3 per cent in 2014. This growth was mirrored by a

19
19.2 per cent rise in the total domestic credit to Ksh 2,830.5 billion in December 2015
compared to a growth of 16.1 per cent in December 2014.

Key macroeconomic indicators remained relatively stable and supportive of the growth
during the year under review. Overall inflation eased from 6.9 per cent in 2014 to 6.6 per
cent in 2015 mainly due to lower prices of energy and transport. Monthly inflation rates
fluctuated between 5.5 per cent and 8.0 per cent but were largely contained within the
Central Bank’s target throughout the year. Generally, the Shilling depreciated against its
major trading currencies as reflected by the weighted trade index which worsened by 5.7
per cent during the review period. The Shilling was mainly supported by a significant fall
in the international oil prices as the country cut-back expenditure on importation of
petroleum fuels and increased diaspora remittances. However, lower earnings from the
tourism sector impacted negatively on the exchange rate of the Shilling in 2015.

In response to rising inflation at the beginning of the year and instability of the shilling,
the monetary authorities adjusted the Central Bank Rate (CBR) from 8.50 per cent to 10.0
per cent in June and later to 11.5 per cent in July 2015. The weighted average interest
rates on commercial banks loans and advances rose by 1.40 percentage points to 17.45
per cent in December 2015 compared to 15.99 per cent in December 2014. The index of
stocks traded at the Nairobi Securities Exchange (NSE) declined significantly from a high
of 5,346 points in the first quarter of 2015 to 4,040 points in December 2015.

In 2015, the current account balance improved largely due to a decline in the import bill
against a substantial growth in export earnings. The decrease in the import bill was
mainly due to the fall in the international oil prices. The growth in export earnings was
largely driven by improved prices for some commodities which more than offset the
effects of the fall in quantities of export. However, the country’s export growth was
curtailed by suppressed external demand.

The effects of the fall in fuel prices were experienced across most of the industries, with
the main beneficiary being transport and storage where there was a significant decline in
costs of production. Other sectors that significantly gained from the lower fuel prices
include construction and thermal generation of electricity.

REFERENCES

i) Tom Mogusu , Daily nation Friday October 1, 2004

ii) http://www.standardmedia.co.ke/business/article/2000195710/uchumi-sends-
253-more-workers-home-after-closing-several-outlets/?pageNo=1
iii) http://www.standardmedia.co.ke/business/article/2000192043/kenya-has-
second-most-developed-retail-sector-in-africa
iv) African Economic Outlook (AEO) 2015

20
 v) Daily nation Friday September 30th, 2004 Uchumi Supermarkets reports
Sh699m loss
vi) The standard, July 20, 2004 Dj CK’ calls it a day at Uchumi Supermarkets
vii) http://conferences.businessinafrica.net/ablf2006/speakers/774168.htm
viii) http://kumekucha.blogspot.com/2006/06/what-was-chris-kirubis-role-in.html
ix) http://www.africanalliance.co.ug/Downloads/News/The%20Uchumi
%20meltdown.rtf
x) http://www.nationaudio.com/News/DailyNation/Supplements/bw/23122003/
story231220031.htm
xi) http://www.statusa.gov/agworld.nsf/505c55d16b88351a852567010058449b/
35ea9760b359ea5f852571bf006f4247/$FILE/KE6006.
xii) http://www.burundi-agnews.info/agnews07062006.htm

Exhibit One. Consolidated statement of profit or loss

21
Exhibit two: Consolidated statement of financial position

22