Tuskys war intensifies as one sibling disowns new manager

Corporate News

From left, Mr Yusuf Mugweru Kamau, the fourth born in the family and a director of Tuskys Supermarket and Mr Daniel Githua, who was unveiled as the new CEO on Monday. PHOTOS | FILE |  NATION MEDIA GROUP

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• On Monday Mr Kago announced that Tuskys, a family business jointly owned by five brothers and two sisters, had for the first time appointed a non-family CEO in the retail chain’s 25-year history to inject professionalism in the business as it prepared to go public.
• Yesterday, Mr Mugweru claimed that his elder brother Stephen Mukuha — who he has accused alongside two brothers of diverting Sh1.6 billion from the company’s accounts — handpicked Mr Githua as the new CEO who has previously worked under him [Mr Mukuha].

The announcement Monday that owners of retail chain Tuskys had hired a professional to oversee its operations has kicked up a storm after one of the rival sibling camps fighting for control of the supermarket disowned the appointment.

Yusuf Mugweru Kamau, the fourth born in the family, who has differed with his siblings over control of the retail chain, yesterday denied claims by his elder brother that Tuskys shareholders had met and agreed to leave the business in the hands of a professional manager.

John Kago, the first born in the family, who doubles as Tuskys chairman, on Monday unveiled Daniel Githua, the chief executive of Speed Capital, as the new managing director of the retail chain, saying the appointment was made with the agreement of the entire family after a February meeting where they resolved their differences.

But Mr Mugweru, through his lawyer Philip Murgor, yesterday maintained that no such meeting took place to resolve the differences which are the subject of law suits pending before court.

Mr Mugweru further questioned Mr Githua’s suitability to head the retail chain that is Kenya’s second-largest and threatened to file a winding-up petition on the business should his siblings fail to speedily resolve their differences.

On Monday Mr Kago announced that Tuskys, a family business jointly owned by five brothers and two sisters, had for the first time appointed a non-family CEO in the retail chain’s 25-year history to inject professionalism in the business as it prepared to go public.

Yesterday, Mr Mugweru claimed that his elder brother Stephen Mukuha — who he has accused alongside two brothers of diverting Sh1.6 billion from the company’s accounts — handpicked Mr Githua as the new CEO who has previously worked under him [Mr Mukuha].

The new CEO, Mr Mugweru claimed, will be under Mr Mukuha’s control. Mr Mugweru declared the appointment as invalid, having been made at a time when the family is embroiled in wrangles arising from allegations of fraud, mismanagement and assault.

“The board and shareholders have not met nor resolved to appoint Mr Githua as CEO,” Mr Mugweru said in a statement sent to the Business Daily.

“Mr Githua (the newly appointed chief executive) would not qualify to hold such a position having worked for and under Mr Mukuha — the discredited CEO. His appointment is thus null and void.”

Tuskys has been run by seven siblings, including Mr Mukuha, Mr Mugweru, Mr Kago, Mr George Gachwe (who was this week replaced as managing director), Sam Gatei, Mary Njoki and Mary Njeri (deceased).

Apart from Mr Kago, the four brothers own a 17.5 per cent stake each in Orakam, the holding company of Tusker Mattresses Ltd. Mr Kago and his two sisters hold the remaining 30 per cent stake, shared equally among them.

The siblings began fighting in February 2012 when Mr Mugweru wrote to the retail chain’s financial director demanding the register and bank accounts of all firms owned by Tusker Matresses.

He claimed that Mr Mukuha, Mr Gachwe and Mr Kamau had used related companies and subsidiaries like Enkarasha, Magic Pay and Ndykak Investments to irregularly draw Sh1.6 billion from the retailer.

He accused his co-directors of trying to subvert the course of justice by converting the said companies into subsidiaries of Tusker Mattresses and the money in dispute to loans. The three, however, denied the charge, accusing Mr Mugweru of abusing the legal process by publicising the dispute in the media.