Uchumi Supermarkets is facing a legal battle after a liquor store operator, Dominic Mwangi, sought KES 4.5 million in compensation, claiming he was unlawfully ejected from the retailer’s Lang’ata Hyper branch to make way for China Square.
Mwangi, who operated the liquor store under Grand Liquor Suppliers & Esteem Gas Supplies, alleges that Uchumi violated a court order issued on May 8, which barred the supermarket from leasing out the premises pending the hearing of his eviction case.
“The defendant acted contrary to the court order by letting out the premises to a third party,” reads the lawsuit filed by Mwangi, who is now seeking redress for his removal from the 100,000 square feet space.
According to court documents, China Square, a household goods store, took over the Lang’ata Hyper branch from Uchumi and invested Sh600 million to capitalize on the strategic location along the busy Lang’ata road complex. The store opened in mid-June, despite the court injunction that barred Uchumi from leasing the property to other tenants. As a result, Mwangi is demanding compensation amounting to KES 300,000 monthly rent accrued from June 7 and an additional KES 3.6 million for one year’s rent, which he claims was unlawfully denied to him.
Furthermore, Mwangi has called for the jailing of Uchumi Chief Executive Lawrence Ngao and Chairman John Karani for up to six months for contempt of court. He argues that Uchumi’s management disregarded the court order by proceeding with leasing arrangements, thereby obstructing justice.
The liquor store, previously located outside Uchumi Lang’ata Hyper, was demolished to pave the way for China Square. Uchumi has since renovated the premises and launched its own business focused on fresh produce.
Mazars Consulting Ltd, which supervises Uchumi’s company voluntary agreement (CVA), reported positive developments in the retailer’s recovery strategy, highlighting that the financial viability of the Lang’ata Hyper branch was contingent on securing a new tenant. Uchumi’s unaudited financial records show a 68 percent growth in sales, averaging KES 5.1 million monthly between July and December last year compared to KES 3.03 million in 2022.
Meanwhile, Uchumi continues to seek financial stability, having recently sold three acres of land in Kasarani for KES 401 million. The proceeds, amounting to KES 351 million, have provided a temporary reprieve for the struggling retailer as it negotiates the sale of the remaining 17 acres amidst a legal dispute with the Kenya Defence Forces.
