Friday, June 02, 2006

Uchumi: class action suit for kirubi, pwc necessary

I watched a frustrated John Masterten Smith read a statement announcing Uchumi's closure on 1st June 2006. Lots of investors were taken to the cleaners in one feel swoop. Its notetworthy that some major shreholders who really are responsible for the failed expansion notably Chris Kirubi and ICDCI had long exited the chain. Am convinced that these guys intentionally took the chain to the cleaners so as to buy it later in an 'auction'. they should not be left alone to play around with investors money otherwise people will lose confidence in our financial markets.

Unfortunately, we do not have sufficient laws dealing with this kind of securtities fraud or insider trading as have other developed markets. The only option left now is for shareholders to come together and launch a class action suit against the auditors who have kept mum all the years and the likes of Kirubi. This has been sucessfully done in countries like the US where a tobbaco giant was sued by sick smokers and pharmaceuitcals were sued for side effects of their drugs.

Recently in the US there has been a battery of activity on such cases where executives of energy giant, Enron (Jeff Skilling and Ken Ray) and Technology firm, Worldcom (Bernie Ebbers) were all convicted of fraud or misleading ionvestors. Martha Stewart recently completed her prison term after being convicted for insider trading.


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