Speaking for the first time about the events that preceded his unceremonious sacking, former Uchumi CEO Jonathan Ciano has said that he knew he would be fired soon after Uchumi’s rights issue was completed in December 2014.
“I knew they were going to fire me after a group of new shareholders in Uchumi engineered a boardroom coup that kicked out our board,” Ciano said.
When the list of new shareholders came out after the Rights Issue, the shareholding structure of the company had changed so radically that the government had lost majority shareholding.
In total, the new group had 23.92 per cent against the government’s 14.67 per cent and Industrial and Commercial Development Corporation’s 1.99 per cent.
Ciano says as soon as the new shares register was out, the new group demanded four seats on the board in line with their controlling shareholding. By April last year, the controlling group had prevailed on all the other directors, including the independent directors, to cede their seats for them.
On November 12, 2014, Ciano, who was fired as chief executive in June last year, had given an ominous warning to the company’s shareholders.
Speaking at the company’s annual general meeting (AGM), two days after the company launched the issue to raise Sh895 million for expansion, the chief executive warned there were powerful forces that had set their eyes on a hostile takeover of the retail chain.
“You witnessed your company going under; it came back with big debts. It has paid the debts by denying you dividend. Having now paid the debts, are we now going to allow somebody else to come and enjoy your supermarket with 40 branches with no debt? No, we cannot do that,” he told shareholders.
His warning had been triggered by activities at the Nairobi Securities Exchange (NSE) where foreign investors were dumping shares in the market following negative recommendations on the company’s stock by an investment bank.
In his speech during the AGM, Ciano made a passionate appeal to the shareholders to follow the government lead and take up all their shares in the Rights Issue.
But that was going to be the last time he spoke to shareholders in an AGM.
Among the directors shown the door were investment banker James Murigu, Khadija Mire who was the board chair, Mbatha Mbithi and Bartholomew Ragalo. Shortly after kicking out the old board, the group would embark on purging the company of its top managers, starting with Ciano.
