In recent years we have seen a number of blue chip companies go from making billions in profits to making losses and eventually collapsing and shutting down completely. The success and failures of a company can be attributed to one man – the Chief Executive Officer (CEO).
In this article, WoK takes a look at the CEOs who were in charge of companies that eventually collapsed in Kenya.
Daniel Githua – Tuskys Supermarket
Daniel Githua was the Chief Executive Officer (CEO) of Tuskys Supermarket. The supermarket chain founded by Joram Kamau who passed on in 2002, was at some point one of the largest and most visited supermarkets in the country. Before being promoted to become CEO, Githua was the Head of Audit at the company for more than four years. Before him was Stephen Mukuha who had to step down after a series of court cases filed by his other siblings who accused him of swindling more than Ksh 1.6 billion from the giant retailer through his subsidiary companies that are the dominant suppliers of Tuskys. After Githua took over, it seemed like a new dawn but it was not long before things began crumbling down. In the year 2020, it recorded a 35 percent drop in sales and was unable to meet the Ksh 200 million monthly wage bill. It started closing down a few branches and by early 2021, all the supermarket’s outlets were shut down countrywide.
Atul Shah – Nakumatt Supermarket
Atul Shah was the Chief Executive Officer (CEO) of Nakumatt supermarket which was one of the most famous shopping outlets in the country. During an interview with Business Daily, Shah revealed that Nakumatt’s downfall began when the Central Bank of Kenya (CBK) closed down Imperial Bank and Chase Bank. He revealed that Nakumatt heavily relied on bank loans from the two banks to ensure its growth and balance.
“When the two banks collapsed, and the new law took effect, money dried up. Despite repaying our loans, nobody was willing to finance us. The cycle stopped abruptly; Nakumatt’s fuel was no longer available. It just did not happen,” the CEO explained during the exclusive interview.
Jonathan Ciano– Uchumi Supermarket
Uchumi Supermarket slow death was painful to many shoppers in Kenya who had come to identify with the giant retailer. The board showed Jonathan Jonathan Ciano the door in 2015 for alleged gross misconduct and negligence resulting in empty shelves at the Uchumi branches due to delayed payments to suppliers. His replacement was Dr Julius Kipng’etich who had been poached from Equity Bank. He quit after a rather dismissal perfomance with his place taken by Mohamed Mohamed. In the early 2000s, this supermarket was among the leading shopping outlets in the country. It is now facing a Ksh 7.6 billion debt that is more than its assets and closed down almost all its branches in the country. The supermarket last turned a profit over a decade ago and is among the worst performing stocks at the Nairobi Securities Exchange despite being the first supermarket to list in the region in 1992. At one point Uchumi had over 1,500 direct employees and gave jobs to over 250,000 people. Today, it can only employ less than 200 employees countrywide.
Peter Nduati – Resolution Insurance
Peter Nduati is the founder and Chief Executive Officer (CEO) of Resolution Insurance. The insurance company founded in 2002 went on to become one of the largest and best insurance companies not only in Kenya but the entire East African Region. On 30th March, 2022 auctioneers stormed Resolution Insurance offices and swept everything. It is now not a secret that the company previously making billions of profits is speedily going south. According to information available in the public domain, the company made a loss of Ksh 457 million in the 2021 financial year. Although the company hasn’t fully collapsed yet, based on the trends of other collapsed companies at least that’s what awaits Resolution Insurance.
Patrick Chebosi – Mumias Sugar
Patrick Chebosi was at some point the Chief Executive Officer (CEO) of Mumias Sugar Company located in the Western province of Kenya. In its heyday, the company would crush up to 7,000 tons of cane in a day, producing at least 250,000 metric tons of sugar annually. The company began going south during Chebosi reign as CEO. It was forced to go under after defaulting loans from creditors, huge power bills and tax arrears. By 2019, Mumias Sugar owed Kenya Commercial Bank (KCB) Ksh 545 million, Ecobank Ksh 2 million, Proparco Ksh 1.90 billion and Commercial Bank of Africa Ksh 401 million. Chebosi was later sent on compulsory leave and suspended in 2019 before the appointment of Nashon Aseka as the new CEO.
