Businessman accused of forgery in a Sh1.1bn Uchumi deal

But the director of leasing firm RentCo dismisses claims that he falsified the signatures of firm’s board members.

Friday March 18 2016

A man walks past a counter at Uchumi Langata Hyper on January 27, 2015. A new audit report has exposed how supermarket was looted. PHOTO | FILE | NATION MEDIA GROUP

A man walks past a counter at Uchumi Langata Hyper on January 27, 2015. A new audit report has exposed how supermarket was looted. PHOTO | FILE | NATION MEDIA GROUP 

By BERNARD MWINZI
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The dealmaker at the heart of a controversial Sh1.6 billion lease agreement with Uchumi Supermarkets Limited is accused in a forensic audit of forging the signatures of the retailer’s board to win a lucrative contract.

But Mr Robert Kanda Nyasimi, a director at leasing company RentCo, describes himself as a shrewd businessman, who is “an authority” in the field, and insists that his deals with Uchumi were “above board”.

The report by audit firm KPMG questions the Sh1.6 billion sale and lease-back agreement that former Uchumi CEO Jonathan Ciano and chief finance officer Chadwick Okumu, on behalf of Uchumi, entered into with RentCo.

In such an arrangement, a firm sells an asset — in this case shelves, computers and desks, among others — to a financier, then rents the same from the buyer.

The deal injected much-needed capital into Uchumi, but what is interesting to investigators is that Mr Nyasimi, who initially represented Rentworks in the negotiations, ended up winning the bid, but this time as a director of RentCo.

'KNOWLEDGE BUSINESS'

Thursday, he admitted that he had sabotaged Rentworks in the deal, but explained that he only did it as a businessman who wanted his own personal growth.

“This is a knowledge business,” he said. “It’s the people behind the company who matter, and that’s why RentCo ended up winning the bid.”

The auditors say Uchumi came out the loser as a result of the agreements; and the devil is in the detail. RentCo signed two leasing contracts with the retail chain, financed by Co-operative Bank and Kenya Commercial Bank (KCB). 

The first was signed on September 3, 2015, but it did not specify the value of the particular items that would be sold to RentCo.

The Strategies and Business Development Committee at Uchumi had approved a request for Sh350 million, but the offer letter approved Sh500 million.

The committee had approved the offer based on information that Co-operative Bank, the financier, would charge an interest of 12.7 per cent, but the contract Uchumi eventually signed indicated that the interest would be at 16 per cent.

The second lease, on January 14, 2015, was financed by KCB to a tune of Sh1.1 billion. The auditors, however, say they did not find any evidence of board-level discussions regarding this agreement.

A document provided to them bore the signatures of the board, but the investigators “were unable to trace evidence of draft versions of the resolutions”.

During a meeting on December 10 last year, the board said it had not signed a resolution authorising the agreement.

“They confirmed that the signatures on the second page of the resolution seemed to be theirs, but suggested that it was likely the second page was taken from another document and attached to the resolution.”

'MALICE'

The Nation has a copy of the letter, provided to us by Mr Nyasimi. We, however, and like the forensic auditors, could not verify the authenticity of the signatures.

Based on these findings, the forensic audit recommends that the Sh1.6 billion agreement be looked into from a legal perspective to determine whether or not it was in the best interests of the company, “and whether there was misrepresentation by the vendor”, which would render it “null and void”.

However, Mr Nyasimi reads malice in KPMG’s recommendations. For one, he says, he is being condemned unheard as, he claims, the forensic auditors never made any effort to contact him.

In a letter to new Uchumi CEO Julius Kipeng’etich, dated March 3, Mr Nyasimi complains that the forensic auditors “only consulted with our competitor, Rentworks”, and hence presented “a one-sided version of events”.

Mr Nyasini on Thursday said he had used his business acumen to his advantage, and should not be punished for it. He said that, other than Uchumi, he had successfully leased the assets of Nakumatt and Naivas supermarkets.

The moral and ethical grounding of his businesses might be in doubt, but here is a man who revels in the astuteness with which he goes about clinching multi-million-shilling contracts.

His business portfolio says it all. In 2013, he says, he made business deals worth Sh400 million, in 2014 he clinched contracts worth Sh1.8 billion, and last year, he leased assets worth Sh4.3 billion.

Among these assets are the Ford Rangers and Subaru Foresters being used by the government.

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