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Naivas family disowns brother claiming 20pc stake

Customers at the new Naivas Supermarket in Westlands, Nairobi. The family feud pitting Naivas Supermarkets’ siblings against each other played out in court yet again on Wednesday. Salaton Njau
Customers at the new Naivas Supermarket in Westlands, Nairobi. The family feud pitting Naivas Supermarkets’ siblings against each other played out in court yet again on Wednesday. Salaton Njau 

The family feud pitting Naivas Supermarkets’ siblings against each other played out in court yet again as chairman of the retail chain disowned his brother, who has been claiming a 20 per cent stake in the business.

Simon Gachwe was allowed by the court to file an additional affidavit showing his brother, Newton Kagiri, had “squandered multiple opportunities” to own shares in the business when he mismanaged Rongai Self Service Store, which had been placed under him.

The alleged mismanagement and embezzlement of Sh230,000 led to Mr Kagiri’s arrest in the early 90s, documents filed in court showed.

“Out of a heart to help my brother, we withdrew the embezzlement case in Nakuru on advice of our father, but proceeded to help him pick the pieces by loaning him goods worth Sh46 million at Nairobi’s Kayole estate named Greenmart Supermarket. He paid Sh38 million but stopped, claiming he had been disinherited in Naivas,” said Mr Gachwe.

A suit filed in court by Naivas for recovery of the debt is still pending.

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The court row has threatened to derail ongoing negotiations between Naivas and MassMart, in which the South African retailer is gunning for a majority stake. It also lays bare secrets of the family’s fabulous wealth.

In his affidavit, the estranged brother claims that Naivas is valued at over Sh6 billion, and is demanding a portion of the 10,000 shares that his late father owned in the business.

Naivas is Kenya’s fourth largest retailer after Nakumatt, Tuskys and Uchumi. Tuskys, yet another family-owned enterprise, is also embroiled in an ownership row.

Mr Gachwe says in the affidavit that is the MassMart deal goes through; Naivas could become Kenya’s biggest retailer by capitalisation.

MassMart is majority owned by Wal-Mart, the American retail giant.

The Naivas lawyer, Francis Mwangi, had asserted in an earlier affidavit that Mr Kagiri was a stranger to the retail chain as the family had agreed to remove him from the initial business since he had run it down. After their father’s death, Mr Kagiri opposed the planned sub-division of properties, saying he had been disinherited.

His lawyer, Evans Ondieki, protested strongly over the alleged petition by Mr Gachwe which he alleged had sanctioned a fraud to deny his client a share of Naivas worth billions of shillings proposed for sale to MassMart.

On Wednesday, Mr Gachwe obtained leave to file a further affidavit showing how the property was subdivided among Simon, Naivas finance manager David Kimani, their sisters, Grace and Linet in a descending order.

Mr Gachwe has 12,500 shares amounting to a 25 per cent stake, Mr Kimani (25 per cent), Peter Mukuha (20 per cent), Grace Wambui (15 per cent) and Linet Wairimu (15 per cent). Mr Gachwe reckons that Naivas is a private company incorporated legally with a list of directors that excludes Mr Kagiri.

“My siblings registered Naivas as a private entity naming Kimani and Gachwe as directors, but I was kicked out. I had contributed to its establishment, why did they throw me out?” posed Mr Kagiri, who claims to have contributed Sh20,000 (20 per cent) of the Sh100,000 seed capital that established the business.

On Wednesday, Lady Justice Hellen Omondi directed that the case be heard next week when all parties will be ready.

Naivas started trading as Rongai Self-Service Store on June 1, 1990, and has expanded over the years to the current 26 stores under the brand.

Mr Mwangi opposed the application saying a “stranger” should not block operations of a limited liability company that he is and has never been part of. He pleads that Mr Kagiri should be contented with whatever he was given by his siblings as a token of brotherhood.

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