The Fall of Akamba Bus: Siblings Rivalry!

Kenyan public transportation was relatively sane in the mid to late 1940s. Never mind that most major roadways were yet to be tarmacked. Private investors had not infiltrated the PSV industry, which was largely dominated by corporations.

Commercial Bus Company, Makueni Bus Company, and Western Bus Company rode the pinnacle of that industry. The Akamba Bus Company was formed when the three firms joined.

The company thrived under the smart direction of its founding director, Sherali Hassan Nathoo. It prospered in East Africa, with headquarters in Nairobi and tentacles reaching as far as Kigali, Rwanda.

In Kenya, Akamba Bus Ltd dominated inland transport (both human and freight). It possessed a fleet of over 100 buses and made millions of shillings every day. At one point, the corporation even established an in-house assembly plant in Nairobi’s Industrial Area – the company was assembling its own buses.

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The brand appeared to be a household name and the pride of the nation.

By today’s standards, Nathoo would be receiving worldwide corporate honours. He contributed to the company’s growth by creating thousands of employment and providing progressive mentorship to young people.

How the ship started sinking

When the founder director, Nathoo, fell ill and died in 2000, the rain began to fall on the company on the eve of the new millennium.

The dead original director was the company’s largest shareholder. His biological sons inherited the company’s shares and control.

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Karim Sherali Nathoo and Moez Sherali Nathoo are their names. Zarina Sherali Nathoo, their stepmother, received one-third of the shares.

Karim Nathoo, the oldest of the two, became the de facto CEO and swiftly took over the company’s operations.

‘Took charge’ is a bit of an exaggeration. Karim couldn’t tell the difference between a company-branded fountain pen and a regular pen.

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

Karim had never set foot in his father’s office during his father’s tenure as the CEO.

Things were going well for the company for a while before the wheels began to come off the rut. They were still raking in millions of shillings every day.

During the 2010 FIFA World Cup in South Africa, the firm made a fortune. They had a deal to transport local football fans to the south.

The young technicians that senior Nathoo had educated and guided were still turning out bodies in Industrial Area around midnight. Disillusionment had not yet set in.

Irresponsible judgement

The company’s problems began when irresponsible judgments at the top became routine. Karim had no concept of what it took to run a firm of this size – or any business.

He would schedule and cancel board meetings. With time, employees’ wages started reducing. Pays would be put off.

Seasoned employees would be rehired together with fresh hires, however, at half their salary. He’d leave the office for weeks at a time.

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Karim reduced the monthly stipends paid to other stockholders, in this case, his sibling and their families. Prior to his father’s death, he had also relied completely on timely, large stipends.

In return, his brother, Moez, would storm a booking office in whichever town he happened to be in and demand cash. Several additional family members would follow suit. Someone was sometimes sacked on the spot for merely hesitating.

Theft and lack of accountability

Workers at the company could see what the owners could not see—the start of the end.

No one dared to question the cashiers when they began stealing. There was no accountability when So-and-So came here and took the money.

The daily remittance to the corporation dropped precipitously. The employees would steal spare parts. Branch managers devised their own billing system, complete with their own receipts.

The fabrication plant in the Industrial Area was closed down. Then it was robbed by dissatisfied employees who had missed many months’ pay.

The procurement officers of the corporation became millionaires overnight. They would charge the company enormous fees for the delivery of spare parts and other necessities. They would reroute deliveries to their own warehouses and retail locations.

Lack of spare parts and reduced number of passengers

The spare part franchisees on Kirinyaga Road are direct benefactors of the Akamba Bus Ltd pilferage.

The company’s financial situation was dire. Wranglings began at the board level. Arguments and finger-pointing would escalate into actual brawls. Employees boycotted the company because it couldn’t pay them.

Due to a lack of spare parts in several regions, notably Uganda and Tanzania, over half of the fleet was grounded.

By December 2010, it was evident that the company was doomed. The company had lost its allure; bookings on the few operable offices were minimal. Due to frequent bus problems, passengers were frequently stranded.

Things deteriorated further. The buses began to run out of fuel. The oil companies that had been supplying the corporation with fuel at wholesale pricing terminated their contracts due to rampant looting and failure to pay suppliers.

Stranded passengers began to pool their money to purchase fuel in order to reach their destination. The auctioneers arrived.

The corporate directors had not spoken in weeks at this point. After numerous run-ins with debt collectors, the branch managers were forced to shut down the office.

In 2011, auctioneers began selling off firm assets in an effort to recover debts that Akamba owed to several suppliers and workers.