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Delayed Uchumi results test investor confidence

Uchumi acting CEO Mohamed Mohamed
Uchumi acting CEO Mohamed Mohamed. FILE PHOTO | NMG 

Investors in Nairobi Securities Exchange (NSE)-listed Uchumi Supermarkets #ticker:UCHUM remain in the dark as the troubled retailer is yet to publish its financials in the latest regulatory breach.

The firm missed the February deadline to publish its half year results for the period to December 2018. And despite getting a five-month extension, it is yet to release its financials for the year ending June 2018.

Uchumi Acting Chief executive Mohamed Mohamed yesterday referred the Business Daily to the retailer’s statement linking the extended delay to its ongoing “turnaround” activities.

This came as experts cautioned the delays were hurting investor confidence.

“In light of the various initiatives that we are undertaking to revive the chain including preparation of the Company Voluntary Arrangement; it was not possible to finalise the audit,” said Mr Mohamed in a statement.


Analysts said the regulator, Capital Markets Authority, (CMA) must arrest the breaches by enforcing the law to protect investors. They added that it was crucial in ensuring an orderly market.

“The listed companies are required to publish their accounts before a certain deadline so that the investors wanting to invest in these companies might be able to make an informed decision before buying their shares,” said Kunal Ajmera, chief operating officer at Grant Thornton.

“A delay in publishing these accounts signifies some challenges with the audit and may reflect negatively on the management of the company.”

Actions the CMA can take include suspending the retailer from trading or penalising it.

“In other markets like the UK, the regulator has suspended trading in securities pending clarification of a company's financial position,” said Shitul Shah, a partner at Nairobi-based law firm Daly and Inamdar Advocates.

Uchumi is fighting to stay afloat amid Sh900 million winding up suits. The retailer has struggled to raise new capital to fund its operations, even as it sees closure of branches and frequent stock-outs.