Uchumi ex-bosses face fur­ther ac­tion

Land was sold de­spite Sh613 mil­lion hav­ing been raised from an­other as­set sale and lease­back trans­ac­tion, says the CMA

The Star (Kenya) - - News Business - CON­STANT MUNDA @munda­con­stant

For­mer Uchumi Su­per­mar­kets chief ex­ec­u­tive Jonathan Ciano faces fur­ther dis­ci­plinary ac­tion for pro­fes­sional mis­con­duct and fi­nan­cial im­pro­pri­eties be­tween 2012 and 2015, the reg­u­la­tor has said.

The Cap­i­tal Markets Au­thor­ity says in­ves­ti­ga­tions into how Sh895 mil­lion raised through a rights is­sue was used and sale of as­sets val­ued at Sh1.1 bil­lion, which the board de­nied ap­prov­ing, are still on­go­ing. The sale of land, the CMA says in its ver­dict re­leased late Fri­day, was done de­spite Sh613 mil­lion hav­ing been raised from an­other as­set sale and lease­back trans­ac­tion.

Ciano and for­mer fi­nance chief Chad­wick Okumu were sacked in June 2015.

The in­quiry es­tab­lished most of the cash raised from share­hold­ers in Novem­ber 2014 set­tled out­stand­ing sup­plier debt, and was not spent to ex­pand the su­per­mar­ket as ap­proved. It also learnt that most of the in­for­ma­tion was changed af­ter the ap­proval.

“The co-min­gling of the rights is­sue pro­ceeds with the gen­eral trad­ing funds fur­ther made it dif­fi­cult for USL board to track the ac­tual ap­pli­ca­tion of the rights is­sue pro­ceeds,” the CMA says. “The ul­ti­mate ap­pli­ca­tion of the spe­cific RI pro­ceeds re­mains the sub­ject of fur­ther in­ves­ti­ga­tions.”

The reg­u­la­tor said the two, with for­mer board chair­per­son Khadi­jah Mire and for­mer di­rec­tor James Murigu, had been ban­ished from hold­ing po­si­tions in a pub­lic firm for be­tween one and five years. Bartholomew Ra­galo, a for­mer in­de­pen­dent di­rec­tor, re­ceived a reg­u­la­tory cau­tion.

All of them were, how­ever, fined for reg­u­la­tory breaches rang­ing from poor gov­er­nance, fi­nan­cial mis­ap­pli­ca­tion and in­ad­e­quate over­sight.

Ciano has been banned from serv­ing in a pub­lic firm for five years, fined Sh5 mil­lion ef­fec­tive Novem­ber 17. He has also lost Sh13.5 mil­lion, pro­ceeds he made as a veg­etable sup­plier to the strug­gling re­tail chain, for fail­ing to dis­close the con­flict of in­ter­est to the board. Okumu has been dis­qual­i­fied from be­ing a CFO in a pub­lic firm for two years.

The CMA has also lodged a com­plaint with the In­sti­tute of Cer­ti­fied Pub­lic Ac­coun­tants of Kenya to take dis­ci­plinary ac­tion against Ciano and Okumu for pro­fes­sional mis­con­duct.

Mire has been slapped with a twoyear ban from listed firms and dis­gorged of Sh1.77 mil­lion she earned in al­lowances dur­ing the fi­nan­cial years 2014 and 2015. She is also re­quired to un­dergo a cor­po­rate gov­er­nance train­ing to be el­i­gi­ble for ap­point­ment in fu­ture.

Murigu has been barred from listed en­ti­ties for a year and dis­gorged Sh660,000 board al­lowances. Some Sh855,000 will be seized from Ra­galo who is re­quired to un­dergo cor­po­rate gov­er­nance train­ing. The man­age­ment has been found guilty of cook­ing fi­nan­cial books for the year ended June 2014.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.