Former Uchumi boss Jonathan Ciano has asked current managers to concentrate on turning around the company, even as he dismissed an audit that has listed him among five other employees that have a case to answer.
KPMG’s Factual Findings Report details how the wife of the retail chain’s former boss, Mr Ciano, became Uchumi’s fresh produce supplier. Despite the conflict of interest, and her being found to have over-invoiced the retailer, she was allowed to continue supplying the supermarket.
Yesterday, Ciano came out to dismiss the report, saying it was ‘totally full of false allegations. “Can you ask the management to concentrate on creating business during their tenure,” Ciano said. But he did not say which parts of the reports were false or respond to the specific allegations against him as requested. The audit alleges that he misrepresented Uchumi’s financial position to the public.
The assets sold to RentCo were captured in the financial statements as at 30 June 2014 as a sale with cash received, whereby cash was actually received in September 2014. It also accuses him of not making appropriate disclosures on the sale and leaseback transaction in the 30 June 2014 financial statements. KPMG also found that he failed to inform the strategy committee of changes in interest rate from 12.75 per cent, which was changed to 16 per cent.
The report further notes that Ciano, who is one of Kenya’s most celebrated turnaround CEOs, failed to disclose that he was related to the fresh produce supplier. KPMG says Ciano’s spouse was a director at Eliehon, based on Registrar of Companies records and her identification card found on the former CEO’s official computer. But when this information was presented to the security manager, he in.
