UCHUMI In Financial Meltdown

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One of Uganda’s big supermarkets, UCHUMI supermarket LTD is in a financial meltdown and this has made their operations stagnant solid.

UCHUMI Bakery that was closed by KCCA last week
UCHUMI Bakery that was closed by KCCA last week

Last week, Kampala capital City Authority (KCCA) closed UCHUMI Garden City bakery after being informed of its sorry state.

Indeed, when KCCA health monitoring team raided the supermarket, it was found out that almost everything in the bakery was very old and unclean that needed to have been replaced a long time ago.

KCCA indefinitely closed it until the hygiene issues have been addressed. We visited UCHUMI Gulu branch but its bakery resembled the one that was closed by KCCA.

About a year ago, UCHUMI was ejected out of their Entebbe road Freedom City branch over debts as evidenced in a letter to UCHUMI dated September 03, 2014 that was also served to Kampala South Regional Police Commander.

COMPLAINANT John Ssebalamu
COMPLAINANT John Ssebalamu

At the end of last year, it emerged that Ssebalamu the owner of Freedom City had sued UCHUMI for failure to pay him arrears amounting to over Shs340million.

Through his lawyer, Wycliff Birungi, Ssebalamu and his company, Grapes construction LTD filed two different cases at high court-commercial division.

One for failure to pay him rent arrears that have accumulated to over US$104.697 was filed under civil suit number 858 while the one for failure to pay utility bills was entered under suit number 860.

At the same time, Ssebalamu too filed a case  at commercial court vide civil suit 859, seeking judgment against UCHUMI for 69.561,475.31/= for the goods supplied that have never been paid despite several demand reminders.

It was stated in the affidavit that, “Over a period of June 2013 till January 2014, the plaintiff supplied various goods to the defendant in a sum of Shs284,150,250…it had been agreed between the plaintiff and the defendant that the defendant would pay for the supplied goods within 30 days from the date of delivery,” reads in part Ssebalamu’s plaint.

It adds, “Pursuant to several demands, the defendant then made part payments towards the sum outstanding in respect of the goods however a sum of Shs. 69.561.475.31 is still due and owing…the defendant has despite several demands, refused, neglected and/or failed to pay the plaintiff’s money.”

UCHUMI country manager Mugo
UCHUMI country manager Mugo

Although in his letter to Ssebalamu dated September 4, 2014 pleaded for mercy, nothing changed. “We humbly request that you suspend your vacation notice until our CEO and your client have deliberated on a way forward. In the meantime, we would like to reiterate interest in your client’s premises and carry on as business mpartners,” Mugo’s letter reads in part.

In our interview with Mugo however, he said that all the balances were cleared to zero and that it is UCHUMI that demands Ssebalamu money that was paid in excesses.

“We did advice them (Ssebalamu) to set off the debt from the over paid rent,” Mugo informed Red Pepper in response to the unpaid 69 million.

EVIDNCE: A summary of invoices and payement for the goods supplied by Ssebalamu to UCHUMI
EVIDNCE: A summary of invoices and payement for the goods supplied by Ssebalamu to UCHUMI

He however said that their legal team is ready to tussle with Ssebalamu in court. Responding towards the bakery closure, Mugo said that;  “KCCA inspectors who came to the branch could not take decision but I went to KCCA offices and cleared the matter. It was about bakery tins which usually turn colour after being in use for some time even with regular cleaning due to heat and smoke in the oven.”

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