KCB suspends lending to Tuskys citing management wrangles

The ongoing saga at Tuskys Supermarket took a new twist on Thursday with financiers freezing credit to the retailer.

Kenya Commercial Bank (KCB) has suspended its supply chain financing facility with Tuskys following the eviction of Chief Executive Officer Dan Githua from office.

“In view of the above, we have suspended the Supply Chain Financing facility until we receive your formal response clarifying the above matter,” reads a letter written to Tuksys directors.

KCB has also raised concern about Tuskys financial performance as well as its ability to meet its obligations to the bank.

It was high drama on Tuesday morning when Githua was thrown out of his office by grandchildren of the retailers founder Joram Kamau.

A power struggle for control of the company has played its hand, splitting the founder’s children, who double up as directors, down the middle.

Directors at Tuskys include Yusuf Mugweru (17.5% shares), Chairman John Kago (10%), Stephen Mukuha (17.5%), George Gachwe (17.5%) and Sam Gatei (17.5%). Non directors are Mary Njoki (10%) and Mary Njeri (10%).

On one side of the divide, Yusuf Mugweru is leading the faction seeking a change in management of the retailer.

In a letter dated 23^rd January and signed by three other directors, Mugweru terminated Githua’s contract as Tuskys CEO citing mismanagement, nepotism and conflict of interest.

Githua, who was appointed last May, was the first non-family member CEO of the 26-year-old retail chain.

It is this jostling for control that now appears to have put the retailer in the cross hairs of its financiers.