By Agnes Mwangangi
Uchumi chain of supermarkets risks winding up over its debts, after losing the first round of a court battle that would have stopped its creditors from proceeding with a winding up case.
The survival of Kenya’s oldest supermarket was tied to the Insolvency Act No. 18 of 2015 that is yet to be fully operationalised by Parliament when it enacts the procedural rules and guidelines required for liquidation of companies.
The Chain of Supermarkets relied on a precedent set by the winding up petition for Blue Bird Aviation Ltd in which High Court judge Eric Ogola ruled that the old Companies Act cannot be used to wind up a company until Parliament passes procedures to shut down firms under the Insolvency Act.
However,High Court judge Farah Amin found that Uchumi could not rely on that precedent because the creditor commenced the process of filing th winding up case a day before the law changed.
The case will be mentioned on July 22. Uchumi owes suppliers 3.6 billion shillings with another 2.5 billion shilling debt held by banks with charged assets against a total asset base of sh 6 billion.