After suppliers asked the Kenyan government to intervene in the matter of a Sh1.2 billion debt owed by Tuskys supermarket, The Competition Authority of Kenya (CAK) has officially commenced an investigation on the retailers’ bank accounts.
The retailer which boasts of having the largest chain of stores in Kenya has been ordered to provide the regulator with its monthly bank statements for the past one year for all bank accounts relating to its retail business by Friday this week.
Already, shelves at the retail stores are running empty showing that suppliers have stopped working it Tuskys untill the debt is paid.
Tuskys has admitted that there have been no payments but as a technicality says it’s not failure to pay but just “delayed” payment. Tuskys hd issued a statement apologizing to suppliers over the delays. The CEO, Dan Githua had said that the company would release payments scheduled in April and May towards June. This did not come to pass.
CAK ordered Tuskys to settle the Sh1.29 billion by between July 1 and July 16 threatening hefty actions if the orders were not followed. “Any person who fails to comply with the order of the authority commits an offence,” said CAK in a letter to the retailer. “This matter remains under investigations and further orders will be issued as and when merited”.
Making the matter worse, Tusker Mattress wrote to the watchdog stating that the debt was only Sh884.3 million, which after investigations was found to be a blunt lie.
“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,” CAK wrote in a letter to the retailer.
Although part of the debt was accumulated before the global pandemic, Tuskys has resorted to blamed its woes on Covid-19.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]