Tuskys suppliers’ debt is due on July 16, according to a Competition Authority of Kenya (CAK) directive. The regulator launched a probe against the retailer, to unearth reasons behind the debt.
Tuskys has between July 1 and July 16 to settle its suppliers’ debt. The Competition Authority has ordered Tuskys to first settle KSh 396.2 million to FMCGs by July 1. It will later pay the KSh 499.1 million debt to non-FMCG suppliers within 30 days from June 16. The retailer will also settle its KSh 400.9 million with 14 days after June 16.
Further, Tuskys will require CAK’s approval before paying director bonuses or opening new branches. These conditions are necessary to preserve cash to pay retailers.
“Tusker Mattresses Limited from the date of this order must obtain written concurrence of the Authority as a pre-condition for expansion. The Authority prohibits [Tuskys] from declaring or paying bonuses, fees, and other discretionary compensation to directors,” Business Daily quoted the CAK letter.
READ ALSO: Tuskys’ Suppliers Plead for Payments
Currently, Tuskys suppliers’ debt stands at KSh 1.29 billion. While the supermarket confirmed only KSh 884.3 million in May, further probes by CAK revealed an additional KSh 400.9 million debt.
Tuskys is among four other retailers with delayed payments to suppliers past 90 days. The retailer failed to produce payment plans and evidence of negotiations with suppliers, unlike its three counterparts.
“The authority has issued prudential and reporting orders to one retailer who, after several requests and extensions, failed to present a payment plan or evidence of negotiations with the affected suppliers.”
CAk Director-General Wang’ombe Kariuki
CAK will probe further to unearth the reasons behind delays. The Authority requested Tuskys’ monthly bank statements for its retail business for the past year. Also, the regulator will review audited financial statements, including its subsidiaries’.
