Court lays to rest the ghosts of Uchumi for former executive

When Chadwick Omondi Okumu switched jobs from Celtel Kenya (now Airtel) to troubled retail chain, Uchumi Supermarkets #ticker:UCHM on January 17, 2007, it was certain that it would not all be a smooth ride.

He was part of a team tasked with turning around a limping outfit that had been placed under receivership only six months earlier in May 2006, after it failed to pay debts worth Sh957 million owed to lenders KCB and the PTA Bank.

He says on his LinkedIn page that at the retail chain his task was “formulation and implementation of sound financial policies and measures for proper accounting and control over financial risks and to safeguard the financial health and assets of the group.”

Like many on a new job, Mr Okumu who was the Chief Finance Officer (CFO) dreamed of big things, perhaps cheered up by the then boom in the country’s overall retail business.

For the first few years things seemed to be taking shape. Uchumi’s financial position was strengthening such that by December, 2009 the huge debt that threatened to bring down the giant retailer had been reduced to Sh133 million, prompting the banks to consent to getting the chain out of receivership.

The supermarket was on a profit-making streak since 2007 and was receiving an estimated 18 million customers per annum and recorded a profit in 2008 and 2009. It was an exciting moment for all.

On May 31, 2011, Uchumi Supermarket’s hitherto suspended shares even resumed trading at the Nairobi Securities Exchange (NSE), bringing relief to the shareholders whose stock was locked out four years ago.

All this time, nothing prepared Mr Okumu for the fact that his otherwise bright career was destined for an embarrassing and painful disruption.

On June 15, 2015, eight years after he joined the retail chain, he was fired. The board of Uchumi Supermarkets Ltd then said they sacked him and former CEO Jonathan Ciano for gross misconduct and negligence, a month before his term was set to expire.

Mr Okumu collected whatever broken glass was left from his career and moved on.

He secured employment with Keroche Breweries, hoping that the storm was finally over. But he was wrong. Just as he settled down at the brewer, audit firm KPMG dropped a bombshell, implicating him and other former senior officials in an alleged widespread scam.

He was fired from Keroche. His career had literally hit the dead end unless he fought to save it.

He captured it aptly in court documents. “I have suffered great loss and damage to my reputation and to my profession as a certified public accountant of Kenya by not being able to hold on to a job and being terminated from other entities as a result of the negative publicity brought about by the CMA,” and attached a letter of termination from Keroche Breweries.

As that was not enough, officers from the Directorate of Criminal Investigations (DCI) arrested him over allegations of fraud and misconduct.
Meanwhile, the Capital Markets Authority (CMA) had started investigations against him and other officials implicating him.

READ: Court quashes sanctions against ex-Uchumi top official

After investigations and hearing, the regulator announced in 2016 that it had found Mr Okumu guilty of aiding the misapplication of funds from a 2014 rights issue, failing to ensure that Uchumi’s books were accurate, misleading the retailer’s board to influence their decisions and facilitating a Sh350 million asset sale and leaseback deal with RentCo East Africa.

The CMA barred him from holding office in any public listed company for two years, prompting him to challenge the decision in court.

Faced with the nightmare of shattered career, Mr Okumu opted to fight the CMA’s sanctions. After two years of legal battle, he finally got a reprieve this week when a court quashed the CMA charges against him, citing bias.

The Judge ruled that CMA acted as the investigator, the prosecutor, the Jury and the executioner while handling his case, a decision that will likely affect other decisions made by the regulator.

But it remains to be seen the next course of action that CMA will take after the ruling, considering that it has introduced fresh charges against some of the former Uchumi officials whose charges were quashed by court based on technicalities.

But whatever the course, the decision is a big relief for the man, who according to his linked in page has been seeking solace in consultancy.

He holds a Bachelor of Commerce Degree from University of Nairobi, CPA (K), and MBA (Finance) from Kenyatta University.