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HomebusinessFive Multi Billion Businesses That Collapsed When Founders Died

Five Multi Billion Businesses That Collapsed When Founders Died

A high number of businesses in Kenya are family owned. These businesses are passed from one generation to the next if the structures in place are solid. Sadly, some of the erstwhile highly successful and profitable companies collapse when their founders die. This is mostly due to mismanagement or infighting pitting family members against each other. 

WoK lists five multi-billion businesses that collapsed when their founders died. 

Tuskys 

The giant Tuskys Supermarket’s untimely exit from the Kenyan market was sad if not unfortunate. Tusky was founded by the late Joram Kamau and at one point it was the leading supermarket chain in Kenya with 74 outlets. 

Upon his death in 2002, the business was inherited by his seven children. The supermarket employed more than 6,000 people and had branches countrywide at its peak. However, in 2020 cracks began to show as shoppers were greeted with empty shelves in some rows. 

In August 2020, Syndicate Agencies Limited filed an insolvency suit against Tuskys seeking Sh30.8 million for security services. This would be followed by other suits over huge debts accrued by the retailer. 

Sibling rivalry has been blamed for the demise of the retailer. The infighting among family members stifled the growth of the supermarket as important decisions could not be agreed on by the directors. 

In 2020, Joram’s son Stephen Mukuha admitted that it was their fault the supermarket had collapsed. 

“There’s a prayer I prayed many years ago that Tuskys would not be sold to foreigners, that Tuskys will be ours forever. We wanted to prove we can also do retail like others. It is a big thing for us to have Tuskys run by locals… regardless of colour,” he said at the time. 

The retailer owes its creditors Sh19.6 billion. 

Njenga Karume’s Business 

Njenga Karume was a prominent politician and a prolific businessman. At the time of his death, he left businesses worth billions and Sh300 million to cover unforeseen events and medical bills. He seemed to have planned for his succession, however, eight years later, his children and trustees are jostling over his wealth even as they spend millions in lawyers’ fees. 

His empire lies in ruins and his once profitable Jacaranda Hotel is riddled with debt. 

John Kagema 

John Kagema was the founder CEO of Equity bank. He breathed his last in 2018 and left his vast empire including the luxurious Enashipai Resort and Spa in Naivasha to his widows and children. His wealth included 118 plots, an insurance policy and 21 companies, a mining company and a fleet of motor vehicles. 

In 2019, Serah Wanjiru filed an application saying she was left out of the succession proceeding yet she had been married to the late Kagema under the Kikuyu traditional ceremony and even had kids with him. Esther Njeri and her son also filed a petition the same year seeking to be included in the transfer of the administrative rights of the Kagema estate. 

Akamba Bus 

Akamba was founded by Nathoo who passed away in 2000 and his shares were bequeathed to his wife Zarina and his two sons Moez and Karim. The two sons became the directors and years later the once thriving company lost its foot. In 2012, the company was in debts with some of their buses  auctioned. 

John Njoroge Michuki 

The no-nonsense former cabinet minister John Michuki was a wealthy man who invested heavily in multiple sectors. He had left a will which stipulated that his wealth be shared equally among his children.

Michuki’s youngest daughter Yvonne Wanja raised alarm over the incurrence of substantial liabilities by Windsor Hotel and Country Club and severe negligence on the part of her siblings named as executors of the will. 

Windsor Hotel is a pale shadow of its former self.