How Sibling Rivalry Drove Akamba Bus Ltd Out of Business

Akamba Bus
  • In the mid to late 1940s, public transport in Kenya had some semblance of sanity. Never mind that most major highways hadn’t seen any tarmac yet. Private investors hadn’t infiltrated the PSV industry; it was mostly aligned to companies.

    Three companies rode the apex of that industry: Commercial Bus Company, Makueni Bus Company and Western Bus Company. The three companies merged and founded a singular entity; The Akamba Bus Company.

    Under astute leadership by its founding director, Sherali Hassan Nathoo, the company flourished. It thrived in the East African region with headquarters in Nairobi and tentacles as far off as Kigali, Rwanda.

    In Kenya, inland transport – human and cargo – Akamba Bus Ltd had the major share. It had a fleet of over 100 buses, raking in millions of shillings on a daily basis. At some point, the company even set up an inhouse assembly plant in Industrial Area, Nairobi – the company was building their own buses.

    The brand was a household name, and pride of the nation, or so it seemed.

    Nathoo, by today’s standards, he’d be winning global corporate awards. He helped grow the company, and, along the way, created thousands of jobs and progressive mentorship for young people.

    The rain started beating the company towards the new millennium when the founding director, Nathoo developed ill health and eventually passed away in 2000. 

    The deceased founding director was the major shareholder. His biological sons inherited the shares, and control of the company.

    These are Karim Sherali Nathoo and Moez Sherali Nathoo. A third of the shares went to their stepmother, Zarina Sherali Nathoo.

    As the elder of the two, Karim Nathoo became the de facto CEO, and quickly took charge of the company’s management.

    Well, ‘took charge’ is more of a hyperbole. Karim couldn’t tell the business end of a company-branded fountain pen.

    The CEO – whisky glass in hand – would ‘spend days swivelling on a high-backed executive chair signing cheques and barking at secretaries’.

    All through his father’s tenure at the helm of the company, Karim hadn’t once set foot in that office.  

    Things went well for the company for a while before the wheels started getting off the rut. They were still making millions of shillings daily.

    Particularly, the company made a killing during the 2010 FIFA World Cup in South Africa. They had a package to ferry local football fans to the south.

    The youthful technicians the senior Nathoo had trained and mentored were still burning the midnight oil in Industrial Area churning out bodies. The disillusionment hadn’t set in yet. 

    Woes at the company began when bad decisions made at the top became a regularity. Karim had no idea what it takes to run a company this big – or any business at all.

    He’d call and cancel board meetings. He’d start making pay cuts. He’d delay salaries. He’d hire seasoned staff and hire newbies for half their salaries. He’d disappear from the office for weeks on end.

    Karim made slashes of the stipulated monthly stipends to other shareholders – in this case, his sibling and their families. Before his father’s death, he’d also solely lived on timely, generous stipends.

    In response, his brother, Moez, would storm a booking office in a random town he’d be in and demand cash. Several other members of their families would follow suit. Sometimes, someone would be fired on the spot for mere hesitation.  

    Workers at the company could see what the owners couldn’t see. The beginning of the end.

    The cashiers started stealing – no one would ask questions. So-and-so came here and took money – there was no accountability.

    The daily remittance to the company plummeted. The staff would steal spare parts. Branch managers created a parallel billing system – with their own receipts.

    The Industrial Area fabrication plant closed down. Then looted by disgruntled staff who had missed several months salaries.

    The company’s procurement officers became overnight millionaires. They would bill the company exorbitant sums for the delivery of spares and other essentials. They would re-direct delivery to their own warehouses and outlets.

    The Kirinyaga Road spare part franchises are direct beneficiaries of the pilferage at Akamba Bus Ltd. 

    The company’s financial health was on its knees. At the board level, wrangles began. Finger-pointing and arguments would escalate to physical brawls. The company could not pay employees leading to boycotts.

    Almost half of the fleet was grounded due to scarcity of spares in various parts of the region, including Uganda and Tanzania.

    Akamba Bus

    Towards December 2010, it was clear that the company was going under. The company had lost its appeal; bookings were low on the few functional offices. Passengers would often be stranded due to frequent bus breakdowns.

    Things went from bad to worse. The buses started running short of fuel. Due to the unchecked looting and defaulting on payments to suppliers, the oil firms that had been supplying the company with fuel at wholesale prices terminated their contracts.

    It became common for stranded passengers to pool resources to purchase fuel to reach their destination. Auctioneers came calling.

    At this point, the company directors had not been on talking terms for weeks. The branch managers had to stop office operations after constant run-ins with debt collectors. 

    In 2011, auctioneers started selling off company properties.

    steal death
  • Source: KENYAGIST.COM