Kiambu-based milk processor Githunguri Dairy Farmers Co-operative Society has filed a petition seeking to wind up Uchumi Supermarkets #ticker:UCHUM in a move that is expected to increase financial pressure on the troubled retail chain.
The milk processor made its intention public with publication in local newspapers of a notice inviting any creditor who desires to support or oppose the winding up of Uchumi to join the case.
“Notice is hereby given that a petition for the winding up of the above mentioned company by the High Court was on the September 3, 2018 presented to the said court by Githunguri Dairy Farmers Co-operative Society…and any creditor or contributory of the said company desirous to support or oppose the making of an order on the said petition may appear at the time of hearing,” reads the notice in part.
Justice Mary Kasango will hear the petition on October 17, 2018.
Githunguri Dairy’s move is being seen as signalling a deepening of the retail chain’s troubles even as it struggles to raise new capital to fund its operations.
Uchumi has in recent months been forced to closure some of its branches besides experiencing frequent stock-outs and failing to pay staff on time.
Githunguri Dairy was among the firms that joined a 2016 petition by San Giorgio Limited to wind up Uchumi Supermarkets over the retail chain’s failure to pay Sh53 million for the supply of counters, trolleys, baking and refrigeration equipment between 2011 and 2015.
In joining the petition, Githunguri Dairy Farmers Co-operative Society had revealed that Uchumi owed it Sh99 million. It was not possible to establish wether the latest dispute is linked to the old debt or is the product of a separate dispute.
The petition comes less than two months after household goods company Tropikal Brands Afrika sued Uchumi Supermarkets for Sh35 million in unpaid supplies.
Tropical Brands said in its petition that Uchumi had failed to settle the debts for up to five years, despite the credit period being fixed at 90 days from the date of supply.
Uchumi has been struggling under the weight of debts and a cash crunch that has affected its ability to pay staff salaries on time. The retail workers’ union has previously said that non-payment of salaries, which began last December, had affected 1,355 employees.
Uchumi, which has been struggling to recover since it first went into receivership in mid-2006, has posted losses in the past three years, weakening its position to pay suppliers and finance operations.
The retailer came out of receivership in January 2008, riding on a Sh675 million bailout loan from its principal shareholder, the government.
The retail chain, which owes suppliers over Sh3.6 billion, has been banking on the sale of land in Kasarani to turn around its fortunes but the money – estimated at Sh2.8 billion, has been slow in coming because of challenging approval processes.
The company’s chief executive officer, Mohamed Mohamed, last month said that there are pending approvals but declined to offer more details, insisting that such discolsure would be in breach of rules governing public listed companies.
The partially State-owned retail chain has been seeking funds to restock its 12 branches that are now almost empty and to raise funds from other shareholders away from the Treasury.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.