The board has appointed General Manager Owino Ayodo as the acting CEO as the recruitment of a new CEO and CFO commence immediately.
The Human Resource Manager Michael Kibe has also been suspended.
Uchumi Board Chairperson Khadija Mire says the action was taken amidst major challenges facing the company that include cash flow challenges that have resulted in suppliers not being paid on time.
Mire says the firm will dispose non-core assets worth Sh2 billion in a bid to pay over Sh1 billion it owes its suppliers and inject capital into the business.
“We want to assure suppliers that we have plans to pay them as soon as possible and urge them to continue to give us their support in the meantime, ” Mire said.
She said the firm also intends to get a management consultant to review its business model as well as its expansion plans.
“The board would like to reassure all out stakeholders that Uchumi Supermarkets continues to operate as a going concern; that these measures were necessary to ensure that the business is run on sound principles of good corporate governance, irreproachable leadership and high integrity, ” she added.
She revealed that the firm had put aside funds towards the refurbishment of some of its key outlets including Sarit Hyper, Langata Hyper, Ngong Hyper, Capital Centre Hyper and Koinange Street Branch.
Last year, the retail chain’s 99 million shares issued at price of Sh9 that were oversubscribed by 83 percent to Sh1.6billion against a target of Sh895 million.
Uchumi was seeking additional capital to finance its regional growth and expansion programme as it aims to consolidate its position in the region and enable the company to adequately finance working capital for its subsidiaries and grow its market share as well as sales volumes.
In September 2014, the retail chain paid the Treasury Sh33 million, the final payment of the Sh627 million loan it owed the government.
The loan had been given to Uchumi for the purpose of reviving the company that had been declared insolvent and closed its doors for 45 days in July 2006.
Uchumi, which is the only public-listed supermarket chain, has 37 stores in Kenya, Uganda and Tanzania with plans to venture into Rwanda and Burundi soon.
In its 2014 full year performance, Uchumi recorded a 6.8 percent decline in pre-tax profit to Sh453 million from Sh486 million in 2013.