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Coal mogul Kariithi’s land up for auction

The financial institution said in a notice published in a local daily that four parcels of land registered under Kei Mart Limited located in Kiambu County (Limuru, Thigio, Nguirubi) and another in Ngong will be sold at a public auction in June. Total acreage of the land under auction is 18. Karrymart Supermarket, which opened its first and only branch on Nairobi’s Moi Avenue in 2014, last year faced a tough economic period that led to accumulation of supplier debt worth tens of millions of shillings.

Some of Karrymart Supermarkets property could go under the auctioneer’s hammer next month as part of ongoing efforts to recover millions of shillings that the retail chain’s proprietor, George Kariithi, owes a bank. The financial institution said in a notice published in a local daily that four parcels of land registered under Kei Mart Limited located in Kiambu County (Limuru, Thigio, Nguirubi) and another in Ngong will be sold at a public auction in June. Total acreage of the land under auction is 18. Karrymart Supermarket, which opened its first and only branch on Nairobi’s Moi Avenue in 2014, last year faced a tough economic period that led to accumulation of supplier debt worth tens of millions of shillings. The list of suppliers owed money includes a leading milk processor, millers and bakeries. Lack of stock and funds to run operations later led to the retail chain’s closure. Mr Kariithi shot into national spotlight five years ago after he teamed up with a Chinese conglomerate to win a joint coal mining contract in Kitui’s Mui basin. The two blocks have more than 400 million tonnes of coal reserves valued at Sh3.4 trillion ($40 billion), according to the Ministry of Energy estimates.

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Efforts to get a comment from Mr Kariithi did not bear any fruit. Mr Kariithi, a trained pharmacist, is one of the lesser known Kenyan business magnates, who shocked many in 2012 when he won one of the most hotly contested and lucrative Kenya government tenders ever. The deal, however, raised controversy after some Members of Parliament claimed that the consortium of companies did not have financial and technical capacity to undertake the project but the issues were later resolved. Mr Kariithi is the majority owner of Great Lakes Corporation, whose shareholders are listed as Consolidated Securities Limited, Fatima Holdings Limited and Kei Kei Limited. The firm is part of the consortium that won the tender to explore coal in Kitui. The businessman has other interests in South Sudan, DR Congo, Senegal and Zimbabwe.Karrymart joins the growing list of struggling retailers in Kenya that includes Nakumatt Holdings and Uchumi. Nakumatt has since closed more than 10 branches, including Nairobi’s Galleria Mall and City Hall branches. Like Karrymart, Nakumatt’s operations have come under strain due to its huge debt, deepening its loss of territory in the competitive supermarket business. Nakumatt’s Bamburi branch in Mombasa, the Lunga Lunga outlet in Nairobi’s Industrial Area, NextGen (along Mombasa Road) and Thika Road Mall (Thika Road) make the list of shops that closed in the past 18 months.With the closure of its only branch, Karrymart appears to have abandoned the ambitious expansion plan it had laid out in 2014 when it unveiled the Moi Avenue branch. Mr Kariithi had told the Business Daily in an interview that the retailer’s next move was to scout for new space to increase its presence. “There is a very huge opportunity in the retail market,” he was quoted saying. In March last year, while facing supplier debt claims, Mr Kariithi still had the dream of opening more stores and reorganizing the business model.ALSO READ: CIC Insurance writes off Sh60m debt papers owed by troubled Nakumatt

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