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Nairobi - The Uchumi Supermarkets company in Kenya has fired the chief executive who led it out of a debt crisis a decade ago, accusing him of "gross misconduct" and saying it was conducting an audit see how cash from a rights issue was spent.
Its shares closed down 6.25% at 9.75 shillings after tumbling more than 9% at one stage.
Jonathan Ciano, who helped revive Uchumi in 2006 when it was put into receivership and given a government-led bail-out, was ousted along with chief finance officer Chadwick Omondi Okumu after the chain fell behind on supplier payments, the company said in a statement.
Forensic audit
Ciano said he had handed in his notice to the Uchumi board and "they gladly accepted it", but did not elaborate on reasons for his departure.
Khadija Mire, who chairs Uchumi's board of directors, said the company had launched an audit to determine how money raised via last year's 900 million shillings ($9.3m) rights issue and other cash had been spent.
"We really don't have all the details that is why we asked for a forensic audit," she said.
"The money is not lost but the board needs the management to tell it very clearly how the money was disbursed."
Uchumi said it had fallen behind with payments to suppliers but would pay them as soon as possible, adding its bankers had agreed to keep supporting it.
Uchumi, which has outlets in Kenya, Uganda and Tanzania, also said it would sell more than 2 billion shillings ($10m) worth of non-core assets to inject fresh capital.
Business model
It also said Owino Ayodo, its general manager for operations, had been appointed acting chief executive.
Uchumi said it would bring in an external consultant to review its business model and expansion strategy.
Uchumi is facing competition in Kenya from other domestic brands such as Nakumatt and new entrants. Carrefour is due to open stores starting this year, under its franchisee, the United Arab Emirates-based Majid al-Futtaim.
