Sunday, July 5, 2020
Home Business CAK Probes Tuskys’ Bank Accounts Over Sh1.2bn Debt As Shelves Start To...

CAK Probes Tuskys’ Bank Accounts Over Sh1.2bn Debt As Shelves Start To Run Empty

The Competition Authority of Kenya (CAK) is investigating the bank accounts of the Tuskys Supermarket over Ksh1.2 billion owed to suppliers even as its shelves start to run empty.

In line with media reports, the chain retailer has been under probe since April, when suppliers reported to the regulator that the it has not been paying them.

Customers in the recent times of the biggest chain store in Kenya reported that the retailer was running on empty shelves, suggesting that most suppliers have stopped their supplies.

CAK has asked the management of Tuskys Supermarket to furnish it with bank statements, audited accounts, list of suppliers, and their contracts.

The watchdog on top of it has also asked the retailer to pay suppliers Ksh1.29 billion by July 16, warning that retailers who fail to pay suppliers risk a jail term.

“Any person who fails to comply with the order of the authority commits an offence. This matter remains under investigations and further orders will be issued as and when merited,” said CAK.

The management of the Supermarket disputed the amount, saying that it owed suppliers a total of Ksh884.3 million.

CAK, in an independent investigations that the retailer had failed to disclose another Ksh400.9 million owed to suppliers.

In a letter to the management CAK wrote, “With this background and our investigations, the Authority has established that Tusker Mattresses Limited is experiencing incidences of abuse of buyer power in the form of delays in payment of suppliers contrary to sections 24A(1) and 24A(5)(a) of the Act.”

“(Pay) the sum of Ksh396.2 million owed to suppliers of fast-moving consumer goods (FMCG) within 14 days from June 16, 2020. The sum of Sh499.1 million owed to non-FMCG suppliers within 30 days from June 16, 2020,” ordered CAK.

According to the insiders the giant retailer, could follow the path witnessed in the fall of Nakumatt, mainly due to mismanagement and family wrangles.


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