East Africa’s once booming retail giant; Uchumi Supermarkets, is reportedly in a land ownership dispute with the Kenya Defence Forces (KDF).
The Kenya Defence Forces, has laid claim to the 20-acre Uchumi owned prime parcel of land located in Kasarani, near the Thika Superhighway.
According to Business Daily, the KDF has moved its equipment into the piece of land in question, thus creating a standoff with the cash-strapped retailer.
The Nairobi Securities Exchange listed Uchumi is reported to have been planning on selling the land to turn around its dwindling fortunes.
The company had already signed a sale agreement last November (2018) with a church group(Jewel Complex Limited), which committed to buy the land for 2.8 billion Kenyan Shillings.
Jewel Complex Limited paid 330 million Kenyan Shillings deposit in December.
This deal, offered Uchumi’s creditors as well as its suppliers, some level of hope for payment of dues owed to them.
The transaction with the church group however, suffered a setback after the High Court refused to strike out a case that Sidhi Investments had filed against Uchumi in 2005. Sidhi Investments, claimed that the retailer reneged on a sale deal after receiving 10 percent payment for the land.
After the now retired High Court Judge; John Osiemo refused to strike out the case in 2007, Uchumi challenged the decision, insisting that there was no sale agreement, and that it did not receive any money from Sidhi Investments as deposit for the property.
Jewel Complex Limited; the church group in question, which was tipped to buy the Uchumi owned land, is a firm owned by five top officials of Jesus Winners Ministry.
Edward Mwai Kiongo has a 36.36 percent stake, while Agnes Wanjiku Kiongo, Raphael Mwiti Thiaru and James Kiongo Mwai each own 18.8 percent in the firm.
Paul Gichohi Mutune owns the other 9.09 percent.
In a response to queries from Business Daily, the spokesperson for the Kenya Defense Forces, Colonel Paul Njuguna said “The Roysambu KDF Camp is on Ministry of Defence land; the issue of laying claim to a military camp does not arise. The onus is on the claimant to provide evidence,”.
Uchumi on the other hand, says that it is engaging KDF over the ownership dispute. It has kicked off negotiations to wrestle back its most prime asset from KDF.
The retail company said in a statement; “We are engaging with them to resolve the issue. We are confident that this matter will soon be resolved,”.
Uchumi is expected to meet its creditors on Monday, to table plans for its revival.
The proposed recovery plan filed in court reveals that the retailer is in a deep financial hole and will only survive if its creditors agree to forfeit 70 percent of their total claims estimated at about 3.6 billion Kenyan Shillings.
Uchumi disclosed in the court documents that it is fighting a record 45 legal suits before the magistrate’s courts, the High Court and Tribunals and as a result, is unable to pay its debts.
