This archive report was first published on 2 January 2020.
January 22, 2018, marked a significant turning point for Nakumatt Holdings, as the company was placed under administration. However, what transpired before this date is a story of questionable governance and related party transactions.
According to a review of the company's financial statements, Nakumatt's directors had lent themselves more than Sh1 billion in interest-free soft loans by the time the company was placed under administration. This revelation comes from a report for the year ended February 2018 by Parker Randall Eastern Africa, the retailer's independent auditor.
The auditor's report did not specify which individuals owe the company money, but it highlighted the weak governance in the board of the former giant retail chain. Nakumatt owes banks, landlords, and suppliers as much as Sh20 billion.
Atul Shah, the founder and former chief executive of Nakumatt, was among the two individuals listed as directors of the company as of the report date. The amounts owed by insiders had dropped to Sh948 million as of February 2018, the period for which the latest financial records are available.
