Uchumi suppliers now seek legal action against investor

Dar es Salaam. In an effort to try and recover their billions of shillings, tens of suppliers to Uchumi Supermarkets (Tanzania) Limited yesterday wrote to the registrar of companies to seek intervention.

A letter dated October 16 this year informed the Business Registration and Licensing Agency (Brela) that the investor closed down business without any communication, while knowing there were debts worth billions of shillings yet to be settled.

According to the letter, some copies will be presented to the office of the Kenyan High Commissioner to Tanzania, others will be sent to Registration, Insolvency and Trusteeship Agency (Rita) and the ministry of Industry and Trade. Suppliers chairman Joseph Mlay, said it was necessary to inform Kenya’s high commissioner to Tanzania because Uchumi Supermarkets Limited was partly owned by the Kenyan government.

“We understand that this issue might be complex to handle due to the nature of its shareholding. We know Kenyan government holds shares. The National Housing Corporation (NHC) and National Social Security Fund (NSSF)also bought some shares when the supermarket was listed in Tanzania last year,” he said.

On Wednesday, the Uchumi chief executive officer announced that the firm was pulling out of Tanzania and Uganda to stem losses incurred in the last five years, leaving about 900 workers not knowing what their fate would be.

The retailer, headquartered in Kenya, has lately been facing a management and financial crisis that impacted negatively on its operations across the region, including its base in Kenya where it has put for sale its massive Uchumi Hyper mall for Sh40 billion to settle its debts.

Uchumi Supermarket Limited, the only cross-listed and listed supermarket on the Dar es Salaam Stock Exchange (DSE) entered in Tanzania five years ago and was enrolled at the stock market on August 15 last year with its 265,426,614 shares.

The suppliers request the registrar office to take appropriate action. “Our cry is to get Brela support because all shops are already closed. We were given no notification. Worse enough the managers of the shops have disappeared,” said Mr Mlay.

By yesterday afternoon, about 131 suppliers registered their names and contacts that they appended to the letter.

The total debts of the 131 suppliers obtained through excel programme was Sh3.046 billion, and it was thought that the figure could rise as more suppliers show up.

“We want to get answers to our letter by Wednesday next week. If this fails we will meet again and decide on the way forward,” said Mr Edwin Kibiriti, who used to supply spare parts. His debt was Sh24 million.

Suppliers formed a committee of 10 members to coordinate all matters related to the debt payment. A number of suppliers, small and big expressed their worries with the way the investor dealt with them, saying he lacked transparency.