Cash-strapped Nakumatt sued for owing millions in debt arrears

All is not well at Nakumatt Supermarket.

Supermarket retail chain Nakumatt Holdings has been taken to court over millions in unpaid debt arrears and legal costs.

A section of its Ugandan landlords and suppliers, namely Mpororo Group Ltd, Bright Rwamirama and Florence Rwamirama have filed suit at the High court’s Commercial Division seeking orders to be paid $569,339 (Sh58.8 million) and legal costs.

In the court documents, the three plaintiffs say that the amount is accumulated rent for Nakumatt’s store in Mbarara, Western Uganda.

The suit comes as a big blow to the supermarket which is currently undergoing financial troubles as it awaits a cash injection for 25 per cent of its equity.

In the suit, it is revealed that Nakumatt started to default from 2013 forcing the plaintiff to dispatch protest letters that were acknowledged by Nakumatt.

Nakumatt’s executive Director Atul Shah acknowledged the indebtedness and promised to clear pay up citing the delays in issues to do with restructuring.

The supermarket paid arrears for June, July and August 2016, via cheque but subsequent cheques were not honored by the banks, attracting an extra accusation of fraud against the retailer by the landlords.

Nakumatt also demanded that the landlords terminate a tenancy agreement with two other tenants who were running electronics and mobile phone set shops respectively so as to convert the spaces into additional space for the supermarket.

This, the plaintiffs argue, attracted separate costs that since November 2012, have not been paid. They are demanding $10,530 from the retailer.

Owing to delays in payment, the plaintiffs claim they have defaulted to repay loans that are now attracting penalties.

Nakumatt’s woes are similar to what Uchumi faced in 2015 when it was closed down leaving suppliers crying over unpaid debts.

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