This archive report was first published on 14 January 2020.
On Judgement Day, September 20, 2017, the Supreme Court delivered a verdict that would seal the fate of Nakumatt, a retail giant that had been struggling to stay afloat. The court's decision marked the beginning of the end for Nakumatt, which would eventually be put under administration in January 2018 to save it from creditors.
However, the damage had already been done. Commercial paper holders, who had lent Nakumatt money to fund its operations, were left with nothing. According to the Nairobi Securities Exchange (NSE), commercial paper holders had lost Sh4 billion, with some institutions owed more than Sh50 million.
Among the big firms that burnt their fingers were investment management firm Cytonn, insurers such as Sanlam, CIC Insurance Group, and Kenindia Assurance, and banks like Prime and Habib. Even the Kianda Foundation, an educational trust, was owed more than Sh50 million.
Speaking to The Standard, Peter Kahi, Nakumatt's court-appointed administrator, said that the commercial paper holders had lost everything. "The guys who will walk home with zero are the commercial paper holders. They have lost everything," he said.
The banks, which are owed billions, are the secured creditors and will have first charge over the Nakumatt head offices. And if any payments are done after liquidation, the administrator, banks, and Kenya Revenue Authority will be first to be paid.
Naivas, which shares a history with Nakumatt, acquired the fittings and equipment last month for Sh422 million. The administrator, Peter Kahi, ruled out the turnaround of Nakumatt, saying it would take years and be costly.
