Renowned Kenyan companies that collapsed after death of founders

Undoubtedly, businesses suffer long-lasting and significant negative impacts following a founder’s death and some of Kenya’s giant companies are a testament to this.

Various issues contribute to the collapse of these businesses, including poor succession plan, family conflicts, lack of trusted advisers, varying visions between generations, lack of financial education for children, exclusion of family members outside the business, poor strategic planning, and governance challenges.

Below are some of Kenya’s multibillion businesses that collapsed after death of founders:

Tuskys

Tuskys was one of the largest supermarkets in Kenya, creating employment for about 6,000 people. It also operated in Uganda, employing around 150 people.

The supermarket chain was founded in 1990 by the late Joram Kamau, and at one point, it was the leading supermarket chain in Kenya with 74 outlets.

Upon his death in 2002, the business was inherited by his seven children. Once, a retail giant, Tuskys crumbled as debt expansions, sibling rivalry, and poor management took a toll on the business.

Akamba bus

It was founded by the late Sherali Hassan Nathoo who passed away in 2000. This bus company thrived in the East African region with headquarters in Nairobi and Kigali.

It had a fleet of over 100 buses, raking in millions of shillings daily. Family conflicts, debt, and mismanagement drove the company into trouble. In 2011, the company’s properties, including buses, were auctioned to pay debts.

Details of founders and current owner of iconic Ambassadeur Hotel in Nairobi

ARM Cement

The ARM Cement was founded in 1974 by the late Harjivandas J. PaunranaIt.  The company grew to be one of the largest cement producers in East and Central Africa with operations in Kenya, Tanzania, Rwanda, and South Africa. Debt and mismanagement drove the company down in August 2018.

Njenga Karume Empire

James Njenga Karume was a Kenyan tycoon who served as a cabinet secretary in the late Kibaki’s administration with a net worth of 40 billion at the time of his death.

He owned 25 multi-million businesses that spanned real estate,  agriculture, transport, and hospitality sectors. Karume was reported to hold stakes in 46 companies including The Standard Chartered Bank (K), Kenya Wine Agencies Limited (KWAL), and New Kenya Co-operative Creameries (KCC).

Long before his death on February 24, 2012, at the Karen Hospital, Njenga Karume wrote his will and delegated the running of his enterprises to the Njenga Karume Trust.

Regrettably, the empire started shaking immediately after Karume’s death with his children, Lucy, Albert and Samuel claiming that the trustees their father appointed had mismanaged the properties.

Alleged mismanagement of the Trust led to losses, loan defaults and tax arrears quickly diminishing the huge empire to a struggling and heavily indebted business.

Village Inn Hotel, 25 acres of Land in Elementaita and Kacheliba Tea Estate were some of his businesses that were disposed of to pay debts.

Kenya Revenue Authority and The Guaranty Trust Bank have made spirited attempts to auction Jacaranda Hotel in Westlands (the crown jewel of the Karume empire) to recover loans, Value Added Tax (VAT), Pay As You Earn (PAYE) and loans owed to them.