CAK now wants Tuskys to focus on settling its current obligations, with the company’s default resulting in cashflow challenges for suppliers and consumers missing essential goods on the retailer’s shelves.
The latest directive arises from a finding that most Kenyan supermarkets rely heavily on debt for expansion, a model that leaves banks and suppliers with major losses when the retailers run into financial headwinds.
“The Authority has issued Prudential and Reporting Orders to one retailer (Tuskys) who, after several requests and extensions, failed to present a payment plan or evidence of negotiations with the affected suppliers,” Wang’ombe Kariuki, the CAK Director-General told the Business Daily yesterday.
Tuskys becomes the first major retailer to face the scrutiny of CAK’s Buyer Power Department, which was created after former supermarket giant Nakumatt Holdings went under with Sh18.5 billion of supplier debt.
Besides the Sh884.3 million supplier debt confirmed by Tuskys, the regulator also discovered that the retailer owed an additional Sh400.9 million through an independent investigation.
