Kenya, renowned for its entrepreneurial spirit, has produced numerous tycoons who built vast business empires from humble beginnings.
Unfortunately, some of these empires have crumbled over time due to challenges such as lack of succession planning, internal fraud, fierce competition, and boardroom wrangles.
Here’s a closer look at some of Kenya’s most prominent tycoons whose multi-billion businesses collapsed:
1. Njenga Karume – Diverse Business Ventures
Njenga Karume, a former cabinet minister, was a successful entrepreneur who built an empire of 25 businesses, including ventures in real estate and hospitality, alongside stakes in 46 other companies.
What Went Wrong:
- Lack of effective succession planning led to the collapse of 24% of his businesses after his death in 2012.
- Ongoing court battles between trustees and family members slowed decision-making, leading to losses, loan defaults, and tax arrears.
Despite forming the Njenga Karume Trust, his estate has significantly declined from its estimated Sh40 billion value, with family disputes hampering growth.
2. Joram Kamau – Tuskys Supermarket Chain
Joram Kamau founded Tuskys, once one of the largest supermarket chains in the Great Lakes region, employing over 6,000 people in Kenya and 150 in Uganda.
What Went Wrong:
- Sibling rivalry, internal fraud, and debt-fueled aggressive expansion weakened the business.
- Fierce competition from rivals like Naivas and Carrefour added to its woes.
- By 2020, Tuskys had accumulated Sh6.2 billion in debt, leading to its collapse after the closure of its last branch in Nakuru.
3. Atul Shah – Nakumatt Supermarkets
Atul Shah’s Nakumatt was once Kenya’s most profitable retail chain, with annual revenues exceeding Sh48.5 billion and 65 stores across Kenya, Uganda, Rwanda, and Tanzania.
What Went Wrong:
- Cash-flow problems began in 2016, with mounting debts owed to suppliers, landlords, and staff.
- An audit in 2018 revealed Sh18 billion unaccounted for under Atul Shah’s leadership.
- Nakumatt’s creditors, including DTB (Sh3.6 billion) and KCB (Sh1.7 billion), voted to liquidate the company in January 2020.
- The chain sold its last six branches to Naivas, marking the end of its operations.
4. Sherali Hassanali – Akamba Bus Company
Founded by Sherali Hassanali Nathoo, Akamba Bus Company was once a dominant player in Kenya’s transport industry, serving over 50 destinations.
What Went Wrong:
- After Nathoo’s death in 2000, his sons Moez and Karim struggled to replicate his success.
- Boardroom wrangles and family disputes disrupted operations.
- Escalating fuel prices, frequent bus breakdowns, and financial mismanagement led to defaults on payments to suppliers.
- By 2012, the company had collapsed, with auctioneers selling off properties to settle debts.
5. Spencon – Construction Giant
Founded in 1979 by Jitendra Patel, Spencon was a leading construction company operating in Kenya, Tanzania, Uganda, and beyond, employing over 5,000 people at its peak.
What Went Wrong:
- In 2009, Emerging Capital Partners (ECP) acquired a 37.4% stake for Sh1.5 billion but failed to turn the company around.
- Financial difficulties escalated, and Spencon eventually collapsed in 2016, resulting in massive job losses and a blow to East Africa’s construction sector.