Brother against brother: Tuskys sibling rivalry stalls plans for merger
What you need to know:
As part of its revitalisation efforts, Tuskys told the CAK last month that it was exploring other funding options, including seeking a strategic investor by July 31, 2020.
It revealed that Tuskys provided information indicating that it made payments to suppliers amounting to Sh2.77 billion in June, 2020.
Troubled Tuskys supermarket is yet to submit a merger application to the competition watchdog ahead of bringing aboard a strategic investor, missing its own deadline.
In what points to a failure by the feuding directors to reach a consensus, the Nation has learnt that the retailer has not honoured a commitment to the Competition Authority of Kenya (CAK) to file the merger plan.
“The authority has not received a merger application from Tuskys,” the Competition Authority of Kenya (CAK) said in a statement to the Nation Thursday.
As part of its revitalisation efforts, Tuskys told the CAK last month that it was exploring other funding options, including seeking a strategic investor by July 31, 2020.
Last month, the agency revealed that it had held four meetings with Tuskys in the past to review the documentation submitted and interrogate its proposed debt settlement plan.
It revealed that Tuskys provided information indicating that it made payments to suppliers amounting to Sh2.77 billion in June, 2020.
Its growing debt has seen suppliers vote with their feet, denying it fresh stocks and leaving it with empty shelves.
But its biggest challenge at the moment is the feuding among the brothers who own the company, which is likely to jeopardise the transaction.
Mr Yusuf Mugweru, the fourth-born of the seven siblings, has vowed to block the deal, saying wrangles among the retail chain’s shareholders are yet to be resolved.
Mr Mugweru, with a 17.5 per cent stake in Tuskys, reckons his brothers are yet to disclose the whereabouts of some Sh1.6 billion that was the subject of a court suit, and is also demanding a forensic audit of the store’s accounts covering eight years.
Tuskys is seeking to sell a majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer as part of efforts to raise cash to pay suppliers and win back their confidence.
