Nakumatt’s plea to the High Court for the appointment of an administrator to run its affairs until the struggling retailer gets back on its feet has split creditors over what action to take in their bid to recover their money.
High Court judge Joseph Louis Onguto Wednesday gave a chance to creditors to declare their stand on whether or not to support Nakumatt’s application for the appointment of an administrator, a move that attracted mixed views amongst the firms seeking recovery of debts owed by Nakumatt.
Eight firms openly stated their support for the appointment of an administrator, with four others opposing the move on grounds that Nakumatt had failed to furnish enough concrete information to earn their backing.
African Cotton Industries, which filed the insolvency petition against Nakumatt, has backed Nakumatt’s call for the appointment of an administrator.
Others supporting the move are Basco Paints, Wow Beverages, Nestle, High Park Investments, Seven Days International, Small Brands and Good Brands.
The eight firms hold that administration is the best route for recovery of debts Nakumatt owes its creditors.
“The prayers sought in the application (for administration) ought to be granted as a matter of public interest as tens of thousands of stakeholders stand to suffer irreparable harm if Nakumatt is wound up,” Smart Brands says.
The National Social Security Fund (NSSF), Crown Beverages, Parkside Developments Limited (Galleria Mall) and Githunguri Dairy Farmers Co-operative Society (Fresha Milk) have opposed the administration calls and accused Nakumatt of keeping crucial information for decision making secret.
“Nakumatt has not dealt with the NSSF honestly and Mr Atul Shah has lied to the NSSF and moved goal posts after making arrangements for payment; since the petition was filed Nakumatt has failed to make a full disclosure of both its true financial position and what plans besides the wish it has for rescuing the company from imminent liquidation,” the NSSF says in suit papers.
The NSSF has also filed an application seeking the appointment of two interim liquidators to watch over Nakumatt and its assets as Mr Justice Onguto determines the insolvency application.
The pension scheme Wednesday sought to join the suit over a Sh73 million debt Nakumatt owes in rent arrears for its Lifestyle branch in Nairobi’s central business district.
Daniel Ngaca, the NSSF’s lawyer, says Nakumatt had taken out a bank guarantee in its favour as security for one month’s rent but only furnished the pension scheme with duplicate documents.