Ailing Uchumi to begin audit of accounts seven months late

Cash-strapped Uchumi Supermarkets will begin audit of books for the financial year ended June 2018 next January, marking a seven-month delay in audit and release of results for the listed firm.

The Nairobi Securities Exchange (NSE)-traded firm was supposed to have released the results by October in line with the Capital Markets Authority (CMA) regulations but now blames its deep financial woes for the delay.

Chief executive Mohamed Ahmed Mohamed announced Thursday that the retailer had received the CMA exemption for the delay and would invite auditors in January and publish the results by end of March, being five months past the regulator’s deadline.

“Following various litigation matters concerning the solvency of the company and the lease agreement on Uchumi headquarters offices, the company has been unable to successfully conduct the financial audit for the year ended June 2018 within the timelines under CMA,” said Mr Mohamed.

The delay denies investors their right to know the financial soundness of the company and also casts doubt on the ability of Uchumi to deliver half-year results within the February 2019 timeline.

Debt crisis

The CMA regulations require listed firms to prepare and publish their annual and interim financial statements within four and two months of the close of the financial year respectively.

Mr Mohamed explained that the board has constituted a financial restructuring team to help get it out of the debt crisis that has left some creditors asking for it to be wound up.

“A tentative commencement date for the audit is proposed in January 2019, subject to conclusion of the stated exercise after which the audited financial statements will be published by March 2019,” he said.