This archive report was first published on 19 June 2020.
On June 19, 2020, the Competition Authority of Kenya (CAK) launched a probe into Tuskys, a Kenyan retailer, to investigate the reasons behind delayed payments to suppliers.
As part of the probe, CAK has ordered Tuskys to settle its suppliers' debt, with a significant portion due on July 16. The retailer has been given until July 1 to pay KSh 396.2 million to Fast-Moving Consumer Goods (FMCG) suppliers, and KSh 499.1 million to non-FMCG suppliers within 30 days from June 16.
Additionally, Tuskys will require CAK's approval before paying director bonuses or opening new branches. This is to ensure that the retailer preserves cash to pay its suppliers.
According to a letter from CAK, Tuskys must obtain written concurrence from the Authority before expanding its business or paying director bonuses. The letter states, 'Tusker Mattresses Limited from the date of this order must obtain written concurrence of the Authority as a pre-condition for expansion. The Authority prohibits [Tuskys] from declaring or paying bonuses, fees, and other discretionary compensation to directors.'
CAK Director-General Wang'ombe Kariuki stated, 'The authority has issued prudential and reporting orders to one retailer who, after several requests and extensions, failed to present a payment plan or evidence of negotiations with the affected suppliers.'
CAK will further investigate the reasons behind the delays and has requested Tuskys' monthly bank statements for its retail business for the past year, as well as audited financial statements, including those of its subsidiaries.
