The High Court has today stopped one of Kenya’s wealthiest families, the Ndegwa family, from throwing out struggling retail chain Nakumatt from its shopping mall.
Commercial Division Judge Joseph Onguto issued the injunction order under a certificate of urgency stopping Junction Limited, its Directors, servants, among others from closing or interfering with the smooth operations at Nakumatt Junction.
The Ndegwa family which owns banking group NIC Bank, insurance Group ICEALION, owns The Junction Mall which hosted one of Nakumatt’s most popular stores.
Earlier in the day Nakumatt management blamed Saturday’s closure of the store on the owners of Junction Mall.
“In the wee hours of Saturday night, the directors and managers of the Junction Mall illegally, deceitfully and using trickery, locked our premises in breach of our existing lease arrangements (including relying on a superseded and terminated surrender),” said the Nakumatt in the statement.
Nakumatt also read malice in the manner the mall owners had communicated the decision to shut down the store.
“The Junction Mall underhand actions on Saturday night, including locking the branch and publicizing a fraudulent and misleading notice claiming that the premises have been surrendered by Nakumatt, are clearly contrary to the terms of the Agreement, illegal and of utmost bad faith,” said Nakumatt in a statement to news rooms.
Nakumatt management argued in the statement that Junction Mall management breached an agreement between the two parties which required the retail chain to pay Sh20 million in rent arrears and stock the store adequately.
“We have paid Sh20 million to the Junction. We have taken verifiable steps to ensure that the premises are adequately restocked by 1 December 2017, including by providing approximately Sh64 million of stock to the branch,” said Nakumatt in the statement.
Nakumatt said the Mall owners action was ambush because it was awaiting the destruction of the agreement signed on September 15, 2017 since it had met its end of the bargain.
“We were waiting for the return of the surrender instrument and were therefore surprised by the unexpected turn of events,” said the retailer.
“In this regard, we met with the directors and managers of the Junction Mall led by director Andrew Ndegwa and the MD of Knight Frank Ben Woodhams on 25 September 2017 to demonstrate to them the restocking plan that we had initiated and that was building up to achieve full stocking by 1 December 2017. The directors and managers wished us well in this endeavour,” said Nakumatt in the statement.
Nakumatt and the Ndegwa family have a complicated relationship. At the Junction Mall, Nakumatt was a tenant in the family’s property. But the family also wore the retail chain’s supplier hat through its majority shareholding in Unga Group, East Africa biggest manufacturers of flour products.
The retail chain has been facing cash flow problems since last year when former Kilome MP Harun Mwau withdrew his capital from the company.
Last month, it announced that it had embarked on merger discussions with Tuskys supermarket chain to forestall total collapse.