The Competition Authority of Kenya (CAK) has barred Tuskys Supermarket from paying its directors or opening more outlets, unless they are consulted.
This comes in the wake of an investigation by the watchdog against Tuskys over a Ksh1.2 billion owed to suppliers.
“Tusker Mattresses Limited from the date of this order must obtain written concurrence of the authority as a pre-condition for expansion,” CAK wrote to the company. “The Authority imposes a prohibition from declaring or paying bonuses, fees and other discretionary compensation to directors.”
Tuskys has also been stopped from declaring or paying bonuses, fees or other compensation to its directors
CAK has is now demanding bank statements, audited accounts, list of suppliers, and their contracts from Tuskys Supermarket management.
Also, the watchdog has also asked the retailer to pay suppliers Ksh1.29 billion by July 16, warning that retailers who fail to pay suppliers risk a jail term.
“Any person who fails to comply with the order of the authority commits an offence. This matter remains under investigations and further orders will be issued as and when merited,” said CAK.
“With this background and our investigations, the Authority has established that Tusker Mattresses Limited is experiencing incidences of abuse of buyer power in the form of delays in payment of suppliers contrary to sections 24A(1) and 24A(5)(a) of the Act,” CAK wrote in a letter to the management.
The retailer has been running on empty shelves in the recent past, with some inside sources suggesting that the executive of the retailer are staging the downfall with the intention of opening new businesses.