Ousted Uchumi Supermarket Ltd (NSE:UCHM) boss quits BAT board

Embattled former Uchumi Supermarket Ltd (NSE:UCHM) CEO, Jonathan Ciano, has resigned from the board of cigarette maker British American Tobacco Kenya Ltd (NSE:BAT). The move comes soon after Ciano also relinquished his roles as the chair of the disciplinary committee of ICPAK.   Ciano was ousted from Uchumi over claims that he was cooking financial statements to conceal losses and fraud in the company. An audit report released after his exit showed that he was among the top Uchumi suppliers, posing gross conflict of interest in procuring supplies for the supermarket chain.

Other allegations leveled against Ciano included gross negligence and gross misconduct, all of which made it difficult for Uchumi make profits or create value for shareholders.

BAT notified the Nairobi Securities Exchange (NSE) of Ciano’s resignation from its board, saying the move was effective from Feb. 26, 2016. The cigarette company didn’t elaborate why Ciano was stepping down from its board, but only said that he was doing so for personal reasons. 

Ciano hasn’t known peace of mind since leaving Uchumi Supermarket Ltd (NSE:UCHM) in June 2015. The retailer chain that has today turned into a pale shadow of its former self posted a series of losses under Ciano. As losses grew at Uchumi, Ciano is said to have resorted to manipulating financial statements to create a false impression that all was well or at least improving. He was accused of cooking books to hide losses amounting to more than Ksh1 billion.

Damaged reputation

The issue of cooking books to deceive investors and creditors has dented Ciano’s reputation and it could be the reason companies where he holds a board seat are asking him to leave. 

Ciano’s replacement

Uchumi Supermarket Ltd (NSE:UCHM) tapped Julius Kipngetich as CEO after the ouster of Ciano. Kipngetich was the director of Kenya Wildlife Service (KWS), a government agency and also served as COO at Equity Group Holdings Ltd (NSE:EQTY). 

Cost-saving mission

Kipngetich’s priorities at Uchumi Supermarket Ltd (NSE:UCHM) have been seen to border on cost-reduction and streamlining the structure of the retailer. Uchumi has announced closure of multiple stores under Kipngetich, apparently as part of the cost-curtailment efforts.