This archive report was first published on 8 January 2020.
January 8, 2020, marked the end of an era for Nakumatt, as creditors voted to dissolve the troubled retailer. The decision was made after creditors were unable to recover the Sh38 billion owed to them.
Nakumatt, which grew from a mattress shop in Nakuru to have branches across Kenya and East Africa, had been struggling to repay its suppliers, landlords, and other creditors since 2017. The company had attempted to turn around its fortunes but ultimately failed.
According to court-appointed administrator Peter Kahi, the next stage is to appoint a liquidator who will pursue firms and individuals that owe Nakumatt and pay off secured creditors, including banks, which are owed Sh13.2 billion.
“Most creditors appear to have moved on, which explains why they did not attend today’s meeting,” said Mr Kahi, adding that those owed Sh16.4 billion participated in the voting.
One of the creditors, who wished to remain anonymous, demanded that former chief executive Atul Shah and other directors return Sh1 billion in interest-free loans they took from Nakumatt. Mr Shah is also in trouble for writing off stock worth Sh18 billion in May 2018, just weeks before the company grounded to a halt.
Naivas paid Sh422 million for Nakumatt’s remaining assets, outbidding rivals Chandarana and Tuskys. The funds will be distributed among the creditors in line with the Insolvency Act 2015.
