Nakumatt Holdings Managing Director, Atul Shah has dismissed claims that the retailer plans on closing more branches
The Government has no plans to bail out struggling retail giant Nakumatt, a State official said. Industry, Trade and Cooperatives Principal Secretary Chris Kiptoo clarified that the retail chain was a private company unlike its counterpart Uchumi Supermarkets in which the Government holds a stake.
The PS was responding to reports that the retailer had requested for a taxpayer bailout to boost its capital base. When Uchumi supermarkets was in the doldrums, Treasury offered a shareholder loan of Sh1.8 billion.
Nakumatt had reportedly sought similar treatment while blaming the Government for its current financial woes. But yesterday, Mr Kiptoo clarified he had not engaged the retailer on the issue of a possible bailout, adding that he had only inquired about its long-standing row with suppliers over alleged non-payment and closure of several of its outlets.
He said he had not anticipated that Nakumatt would ask for a bailout. The retailer’s boss Atul Shah had blamed the Government for its woes and suggested that the Government extend “goodwill to Nakumatt, considering that the current situation was not of their making.”
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“We have no stake in Nakumatt and we are not bailing them out. We also have to consider the moral hazard where we will be encouraging private firms to come to the Government for help,” Mr Kiptoo told the media. Mr Atul in his letter to the PS had blamed a series of Government actions dating back to 1998, including ban on imported beef suspected to be contaminated with mad cow disease, the Kenya Revenue Authority (KRA) move to issue a Sh1 billion tax demand as well as the demolition of Nakumatt Thika Road branch in November 2008.
He also blamed the State for the fire that gutted down Nakumatt Downtown in the Nairobi Central Business District, saying it was caused by repair works on a transformer at Kimathi Street.
He also cited the bombing of Westgate Shopping Mall during the 2013 siege by al-Shabaab militants as having added to its current woes. Mr Kiptoo said Mr Atul’s letter failed to respond to inquiries about the huge debt to suppliers and instead opted to blame the Government for “things that happened a long time ago”.
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