Tuskys Supermarket CEO Dan Githua was on Tuesday escorted out of his office by relatives of the directors in a dramatic scene that was captured on video. The video shows a handful of people storming Githua’s office, demanding he leaves the office and ‘never to return to the company.’
In the video, the embattled CEO initially hesitates to leave but after some time, walks out of what appears to be a boardroom towards the car park and drives off, amidst shouts from a dozen officials following him.
Tuskys Supermarket Board Chairman later in a statement distanced the Board from the actions of their children who led to the ouster of the CEO.
“We would like to state that the children acted on their own volition and not on behalf of the Board of Tuskys,” stated Dr John Kago, the chairman of the family-owned business.
Kago has said the Board regrets and condemns the actions, promising to investigate the incident and issue full details “in due course.”
The Kamau family, through the Board, appointed an outsider to lead the second largest supermarket in May 2015 as it announced the plans to list on the Nairobi Securities Exchange (NSE) within five years.
The appointment of Gathua was seen as a move to strengthen corporate governance. The seven Kamau siblings had been embroiled in persistence wrangles that threatened the growth of the supermarket chain amidst growing competition in the retail industry.
But cracks emerged immediately after the appointment of the new CEO. One of the siblings, Mr Yusuf Mugweru Kamau, distanced himself from the decision to appoint Gathua, saying the new CEO previously worked for his elder brother, Kago, and was likely to be influenced by the Board Chairman.
It didn’t help matters that Gathua sent home seven branch managers and reshuffled 39 other managers two weeks after taking over office. This move may have driven some Board members to question the CEO’s motive to retire long-serving managers, and deepen the wedge between the rival co-owners.
A letter purporting to terminate the services of Mr Gathua written on 22nd January 2016, states Gathua breached his employment contract by being a majority shareholder of Artemis Africa Ltd, which provides staff outsourcing services to Tuskys Supermarket.
The letter goes on to claim; “You have portrayed disrespect to not only the directors of the company but also to the employees and suppliers of the company.”
Poor performance of the company compared to previous years is also a reason given for the dismissal of Gathua by the Board.
The letter is signed by Hannah Wamaitha Kamau (the wife of the late founder Joram Kamau), Mary Njoki Kamau and Kenneth Gachuru Mwangi. John Kago Kamau, Stephen Mukuha Kamau, and former CEO George Gachwe Kamau are copied. Notably, Sammy Gatei Kamau and Yusuf Mugweru Kamau haven’t signed the letter.
But the fact that Gathua continued to be CEO in spite of the letter may have caused the relatives of some directors to take matters in their own hands by frog-marching the manager out of the head office.
According to a 2014 survey by PwC, professionalizing a family business remains the biggest challenge. 40 percent of the respondents said that in addition to professionalizing the businesses, families are also looking at how the professionalize the family.