The Nakumatt Supermarkets Money Laundering Mystery | Money Laundering in Kenya history

Opposition Shadow Finance Minister Bill Kerrow shocked parliament this week by tabling documents that linked one of Kenya's best loved supermarket with Money laundering.

This writer has always found the operations of Nakumatt Holdings extremely fishy long before the current controversy where the opposition shadow finance minister Billow Kerrow has this week tabled documents in parliament linking Kenya's most popular supermarket and Charterhouse Bank to alleged tax evasion and money laundering.

Over the years, even as I have enjoyed walking into Nakumat's well-stocked units all over the country, questions have continued to haunt me at the back of my mind. Mostly the following three:

1. How did the Supermarket chain manage to expand so rapidly within such a short time? A supermarket is a business that requires a colossal cash outlay to launch. You just need to do a quick calculation of the value of goods stocked on any small shelf area to realize the kind of finances required to get just one supermarket branch in a chain up and running. Even where suppliers offer credit facilities, a supermarket cannot avoid paying for huge stocks in their books long before they are ever sold.

2. Why was the supermarket closed briefly in the late 90s over some alleged controversy involving some "mad cow disease" canned beef? Why did the whole issue "evaporate" even quicker than it had started a few days later without a proper explanation, leading to the re-opening of the supermarket? It was at about that time that the rapid expansion gained a new momentum and vigour.

3. How is the chain able to sell highly taxed imported products at such low prices?

There is no denying that apart from poor management from a team that hardly understood the retail trade, Uchumi's problems were also caused by what can only be termed as unfair competition from Nakumatt. According to Kerrow it was discovered by Mullei and his team that although Nakumatt were doing about 20 times the kind of sales Uchumi were registering, it was not paying anywhere near the same VAT or taxes that Uchumi was.

Then there is the other anomaly where it is said that Nakumatt has never declared profits since inception. How do you continue to expand indefinitely while paying your suppliers with no signs of strain, when you are making losses? Of course none of it makes any sense.

There is little doubt about where Mr Kerrow sourced his information. It is clearly from the immediate former Central Bank governor, Dr Andrew Mullei who is currently facing charges of abuse of office brought by the Kenya Anti-corruption commission. Mr Kerow claimed in parliament that the real reason Mullei was suspended was for raising the issue of Charterhouse Bank and Nakumatt. It is said that Charterhouse bank was in the middle of all the tax evasion and money laundering moves of Nakumatt and a number of other companies named. Kerrow said that Mullei was suspended for asking Finance Minister Amos Kimunya to withdraw the License for Charterhouse Bank.

So what is the Nakumatt story?

For years rumours have been circulating about the real source of the supermarket chain's seemingly bottomless deep pockets of cash. However with the tabling of the documents by Hon Kerrow in parliament this week, evidence is now beginning to emerge which seems to support the rumours.

For a long time the real ownership of the giant chain of supermarkets that is said to have started as a single unit selling blankets in Nakuru, was linked to one of the son's of former President Moi. The brief closure of the supermarkets in the late 90s was linked toa struggle between the management and certain political interests keen on a hostile takeover (Kenyan-style).

Later even more shocking rumours emerged linking the chain to money laundering.

When you hear the term money laundering, more often than not it is linked to the illegal drugs trade. That is what is so abominable about this whole issue. Could it be that one of Kenya's most loved brands was financed by cash from the underworld? (see full explanation of what money laundering means).



The papers tabled by Kerrow in parliament persistently and directly point to that possibility. One particular name mentioned by Kerrow in parliament stands out like a sore thumb that begs for attention. And that is the name of a company called, the John Harun Group. There is a very high chance that the man behind this company is none other than John Harun Mwau a man who once stood for the Presidency of Kenya (in 1992) and a former police officer and sharpshooter who suddenly got very wealthy, very suddenly under mysterious circumstances.

We all know where Bill Gates' fortune came from and even that of the two young men that own most of Google Inc. But in Kenya we really don't care and don't want to know how people make their money, we simply roll out the red carpet the minute they prove to us that their accounts have plenty of zeros that follow the first few digits.

Mr Mwau has been publicly linked to gun running for years. His political enemies have often said that he deals in drugs. No proof has been found or brought forward, but Mr Mwau remains a very wealthy man without any tangible money generating assets to justify his wealth.

You must be reading this and wondering if we're still talking about Nakumatt. Yes, we are. The documents tabled by Kerrow indicate that all companies mentioned have very close links to the whole Nakumatt claims.

But there is something even more disturbing.

Why did the Narc government that included the likes of characters that have now distanced themselves from it like Kalonzo Musyoka and Raila Odinga not do anything when they took over the reigns of power? If their true motive was to fight corruption then their zero tolerance for corruption should have caused them to immediately blow the whistle on Nakumatt. If Mr Kalonzo Musyoka is really genuine and Raila Odinga as well, why did they not blow the whistle?

More evidence on what may be the repugnant answer to that question are beginning to emerge.

Dr Mukhisa Kituyi, the Trade minister told parliament that Nakumatt executives called him last week and demanded to know why he was making efforts to revive Uchumi. He even went further to say that the managing director of Nakumatt called him and dared him that if he had "so much money to waste" why not give it to Nakumatt. The cheek!!

As revealing as this confession from the minister is, it also suggests that these Nakumatt officials were extremely familiar with government officials and the Trade minister in particular. How else could they make such cocky statements? How did they get access to the minister in the first place?

If truth be told, nobody in parliament has the moral right to say anything about the Nakumatt controversy, because it is clear that both the previous and current governments know a lot more about this than they would ever like to let out. Could there be a link between the Mullei-instigated revelations of Nakumatt and the swift government decision this week to revive Uchumi Supermarkets? Did somebody know that Nakumatt controversy was coming and decided to quickly cover their tracks? Until we can get some evidence, your guess is as good as mine.

Understand this story better by reading about Al Capone and the brief history of money laundering.

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