Jamii Bora Bank has claimed that it was cheated by Uchumi’s management into buying an additional stake in the troubled retailer.
According to reports appearing in Kenya’s Business Daily, the bank further alleged that the Sh. 500 million rights issue that Uchumi carried was a work of conman-ship as it did not reflect the true financial position of the retailer. “As at now Uchumi is insolvent, but all is not lost, I believe Uchumi will still pay off,” said Kimani.
Last year, Jamii Bora increased its stake in Uchumi to 15.8 per cent and currently holds a higher stake than the government which owns a a 14.67 per cent stake of the retail chain.
“As a listed company, we got the transaction approved by all regulators but the information memorandum was a work of fiction, it did not reflect what we found there,” Jamii Bora’s chief executive officer Samuel Kimani said. According to Jamii Bora, taking up rights in Uchumi would have enabled it to access at least 800,000 customers.