Thursday, January 04, 2007

Giant in pothole

Mugoya Construction Company has been placed under receivership by their principal bankers KCB.

- Earlier post.
- How a receivership happens.


Anonymous said...

Bankelele, can you confirm this story i.e. what is your source? I told a pal that i thought this was one of the most corrupt cos in Kenya with some of the worst workmanship. Would this having to do with all the money they have to refund to Treasury for over-egging their bills? They were the Kirinyaga Construction of the Moi era so good riddance to them.

gathinga said...

Its a shame that one of the most recognisable contruction outfits in the land cannot survive after their godfathers were removed from power.

Anonymous said...

Wonders never cease. Only a few years back, Mugoya operated on margins in excess of 100% and now it's folding up. This can't be called mismanagement.
The government should go further and investigate this outfit. I am certain that most of the billions they made are safely stashed overseas.

Jakarumba said...

Mugoya has not gone down as a resul of straight bankruptcy but rather, the project is done-Moi has left the stage. They acquired almost all of their contracts because of him.

bankelele said...

MainaT: true story. But I have not heard of any road contractor refunding treausry for non performance

gathinga: we'll they survived 4 years and still have quite a bit of (new0 works. Perhaps the bank just got impatient with the owners promises

Ssembonge: Road construction remains a lucrative ( arm of shady work - still with huge margins and without performance standards or proper checks & balances

Jakarumba: They had almost every major govt building contract for years. They remaing in teh game while others ( walked away. They may survive still though few companies ever emerge from receiverships

sijui said...

typical example of a company whose raison d'etre is patronage. Good riddance!

kenyananalyst said...

Mugoya? In the red?

xtra-cash said...

In the red? well, not really. This just means they've had their fill and since they can't get on the gravy train KCB shareholders will be left holding the short end of the stick. Don't for a moment be suprised or feel sorry for them. They've got cash overseas, just not for paying debts. They don't have to, the show is over.

Anonymous said...

People seem to be confusing the owner with the company. Doesn't anyone care about all the hundreds of ordinary people who will be left unemployed once the receivers ruin what is left of the company?

Anonymous said...

Anon- I bet you are also the type of person who gets all sentimental when you see moi being told to go mind his goats or ghost workers being purged from city council. For us to get to stage where we have a sustainable economy, we must get rid of patronage-type of businesses that are to road construction what wabunge are to the Kenyan political system i.e. money guzzlers with nothing to show for it. Mugoya and kirinyaga are examples.

Anonymous said...

MainaT - Anon is part of the patronage system!!!

anon - The money "saved" by closing up mugoya (or dare I say kirinyaga) could used to create more jobs i.e. pay a legit firm to build a real road at reasonable prices.

Furthermore, the siphoned funds are paid for by reducing other necessary expenditure e.g. health.

Anonymous said...

horrible company to work for!
mugoya holds workers paiments for
many month as if they are his slaves .this james mugoya a low low
man no wonder his going down.


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