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Wednesday, October 21, 2020

Mistakes Kenya’s once top business leaders made that ruined businesses

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Overstaying an opportunity: Overstaying in a business after you have achieved your goal is a booby trap. According to former financial analyst and current MP for Kiharu Ndindi Nyoro, in the business of making money, it is critical to know the importance of quitting after you have attained victory. He singles out former decorated CEOs Jonathan Ciano and Titus Naikuni who turned around Uchumi and Kenya Airways respectively.

After earning praises for turning around Uchumi, Mr. Ciano took the wrong turn too Uchumi back to the woodworks he had pulled it from. By the time he was kicked out of Uchumi, Ciano had sets of corporate sins ranging from alleged cooking of books and conflict of interest. On the other hand, after flying KQ to profitability, Mr. Naikuni left the company as the biggest loss-maker in the region with a staggering loss of sh. 26 billion.

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Debts: As much as possible, always keep your debts in check. Failure to do this will see you incur a mountain of facilities you aren’t able to repay or recover. Take Nakumatt for example. Although under the leadership of Atul Shah Nakumatt had seemed to be a bastion of good retail business, the supermarket collapsed due to debts that had piled into billions.

For instance, according to a report compiled by Phylis Wakiaga the CEO of Kenya Association of Manufacturers (KAM) out of the Sh. 309 million owed to suppliers, Nakumatt accounted for 73 per cent together with Uchumi. In the same vein, by 2015, Nakumatt’s debts had reportedly piled from Sh. 4.6 billion in 2011 to Sh. 15 billion.

Kenya Top Business Leaders Takeaway bonus

Sitting on investments: In Kenya’s financial markets, billionaire Baloobhai Patel is regarded as the most diversified high-net worth investor. However, his rise to the top of local money markets has not been without dents. Mr. Patel was once a huge investor in the now troubled Mumias Sugar. In 2006 when Mumias offered a rights issue to raise additional cash, its shares were sold at Sh. 49.5 each.

Had Mr. Patel sold his stake of 17 million shares at this time, he would have made Sh. 841.5 million. When Mumias traded at Sh. 60 apiece, Mr. Patel would have made a cool Sh. 1 billion. However, in 2014, when he gave up and sold his stake at around Sh. 2.50 a share, he only made Sh. 42.5 million! Today, Mumias is trading at cents! Kenya Top Business Leaders.

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