Blow for Tuskys as five ex-staff get nod to sell assets


Employees of Tuskys branches in Kisii protest termination of their contracts and three months' unpaid salary on September 30, 2020. PHOTO | RUTH MBULA | NMG

Five former employees of troubled supermarket Tuskys have been allowed to sell some assets they seized from the retail chain over failure to pay them their dues, a move that could open doors for other employees who are pursuing their pay.

The former employees resigned four years ago and obtained a judgment directing Tuskys to pay them about Sh4 million. The five including Daniel Njuguna and Charles Akwaya later seized some assets belonging to the retail chain, so that they could auction them and recover their payment.

The supermarket, however rushed to court saying an insolvency case was pending before the High Court and some creditors had obtained orders stopping any seizure or sale of Tuskys assets, pending the determination of the case.

The supermarket through general manager Francis Kimani told the court that the orders were publicised and were a matter of public knowledge.

But Justice James Rika of the Employment and Labour Court dismissed the objection saying Insolvency and Companies Acts, which Tuskys was basing its argument, cannot be used to halt proceedings before other courts, which are at the tail end of execution.

“The attached assets are not to be recalled, and placed in the pool of assets belonging to the Respondent, for redistribution among other creditors. The assets have already been attached, earmarked for sale, to satisfy decree, following a separate judicial process, and are to be dealt with to the conclusion of the existing judicial process,” the judge said.

The judge stated that the seized assets are under the jurisdiction of the Employment court and have already been designated for sale.

Tuskys is fighting forced closure of its outlets by landlords and owes suppliers and banks in excess of Sh10 billion.

Tuskys, which was at one time the country’s largest by sales and branches after the collapse of Nakumatt Holdings, has closed tens of stores across the country including major towns like Mombasa and Kisumu.

The retail chain has opted to sell assets in some of its branches to avoid liquidation by more than 60 creditors following delays in receiving a Sh1.6 billion debt from an undisclosed Mauritius firm.

The cash-strapped supermarket has told the High Court that it plans to sell non-core assets like furniture, fixtures and fittings in 19 branches, most of which have been shut by landlords for rent arrears.

In August last year said, the retailer it had inked a deal to raise Sh2.1 billion short-term debt from an unnamed private equity firm based in Mauritius.

The funds were aimed at stabilising operations to make the retailer more attractive to strategic investors it is courting.