Mismanagement, theft and corruption are the biggest contributors to the downfall of Tuskys Supermarket, an employee from the retailer has said.
According to the employee who opened up to blogger Robert Alai, former CFO Mr Daniel Ndirangu and the current CEO Mr Dan Githua have been working to make sure the giant retailer falls, while they siphon funds out.
“What is killing this company is massive conflict of interest issues, poor financial management perpetuated by the former CFO Mr Daniel Ndirangu and bad incompetent leadership by the CEO Mr Dan Githua. Here in finance department we are coerced by the CEO to make payments on fraudulent transactions that benefit the CEO, his relatives and close friends,” says the employee.
Revelations from the employee who works in the finance department further reveal that there are cases where customers do shopping and make payments directly to another company called Flexitech Group which is owned by a head of department in Tuskys Mr Daniel Njiu, who is also a cousin to the CEO.
Flexitech is the company behind Flexipay at Tuskys, a plan where a customer can reserve any item and pay at their own pace.
“This is a way of siphoning money from Tuskys. This money should be going to pay suppliers instead of being paid to third parties. This issue was recently unearthed by the internal audit department,” says the source ” Another case is where the chief commercial officer in Tuskys (Mr, Daniel Koech) owns a company called After Six Limited. With no shame the Chief Commercial Officer signs LPOs to award this company marketing jobs worth millions of shillings knowing very well he is a director/shareholder of the company. This is conflict of interest.”
Despite internal audit reports unearthing the malpractices, no action is taken, mainly because the people who are supposed to implement them are the ones benefiting from the malpractices.
The people looting Tuskys. pic.twitter.com/W7T9FUsZJn
— Robert Alai (@RobertAlai) June 18, 2020
Already, Tuskys has been barred from paying its directors or opening more outlets in the country before consulting the Competition Authority of Kenya (CAK).
The retailer has also been barred from declaring or paying bonuses, fees or other compensation to its directors.
“Tusker Mattresses Limited from the date of this order must obtain written concurrence of the authority as a pre-condition for expansion,The Authority imposes a prohibition from declaring or paying bonuses, fees and other discretionary compensation to directors,” said CAK in a letter to the retailer.
CAK started investigating the bank accounts of the Tuskys Supermarket in April over Ksh1.2 billion owed to suppliers, even as its shelves start to run empty.
CAK has asked the management of Tuskys Supermarket to furnish it with bank statements, audited accounts, list of suppliers, and their contracts.
On top of it, the watchdog has also asked the retailer to pay suppliers Ksh1.29 billion by July 16, warning that retailers who fail to pay suppliers risk a jail term.
“Any person who fails to comply with the order of the authority commits an offence. This matter remains under investigations and further orders will be issued as and when merited,” said CAK.
In 2018, this blog reported how Dan Githua the CEO, Daniel Ndirangu (CFO) and Wamaitha Mukuha (GM Operations) were siphoning money from the supermarket chain in a bid to cripple it as they grow their parallel businesses from the Tuskys platform.
Before being elevated to the position of CEO, Dan Githua was the Head of Audit in Tuskys for more than 4 years while a key Director Stephen Mukuha was the CEO. Mukuha then had a series of Court cases filed by his other siblings who accused him of swindling more than Ksh 1.6 billion shillings from Tuskys through his subsidiary companies that are the dominant suppliers of Tuskys Supermarkets.