Former Uchumi Supermarkets chief executive Jonathan Ciano was on Friday morning expected to record a statement with the police explaining his alleged role in the manipulation of the retail chain’s books during his time at the helm.
Mr Ciano, who headed Uchumi for nearly 10 years, was forced out of office in June last year alongside his chief finance officer, Chadwik Okumu, who was taken into custody yesterday before being released.
He was not arraigned in court to face any charges, but sources indicated that he would be brought to court once Mr Ciano came on board.
Mr Ciano, however, said he was not being sought by the police and that he had agreed to present.
himself to the Directorate of Criminal Investigations (DCI) this morning. “No, the police are not looking for me, I already have an appointment with them tomorrow afternoon. They want to find out about what you have been writing in the papers and I will explain to them,” Mr Ciano said.
Uchumi booked a Sh3.2 billion loss in financial year ending June 2016 after the retailer wrote off the Sh1.04 billion that had been included in the supermarket’s books through manipulation.
It has been suggested that the company used a revaluation of its properties to conceal losses it made in the preceding two years. Uchumi would have been in the loss-making territory from 2013, according to London-based Exotix and Kenya’s Equity Investment Bank.
The retail chain then hired audit firm KPMG to conducted a forensic audit of its books between June 2013 and May last year. KPMG delivered their findings early this month revealing fresh details of unscrupulous dealings at the supermarket.
KPMG’s audit report indicated that the supermarket lacked an adequate background and quality checks that led to the acceptance of conflicted suppliers, substandard products and dubious trade agreements.
The report also showed that the retail chain’s top management may have been involved in the cover up of the illicit financial transaction that took place under their watch.
The investigators found that internal audit activities were not completed as planned and in some instances, findings were dropped from the report without any basis.
“Our review noted that a number of key pertinent issues, including profitability of subsidiaries, creditors’ payments and cash positions were identified and raised by internal audit at audit committee meetings, but we did not find any evidence of further deliberations and action plans on the same by the members of the committee,” KPMG says.
It adds that Mr Ciano received a whistle blower’s email from Mr Peter Waitara in 2014 claiming financial records were being manipulated to confuse the board, bribes were being demanded from suppliers to process payments and in turn the suppliers bribed staff for local purchase orders.
