Nakumatt. [Photo/nation.co.ke]

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The exit of billionaire and former Kilome MP Harun Mwau from Nakummatt set the stage for the dramatic collapse of the firm, documents filed at a court have revealed.

Nakumatt's CEO Atul Shah is feared to have used the firm's working capital to buy the billionaires stake, plunging the firm into a liquidity crisis that mutated into insolvency, Edward Waithaka the director general of Nanyuki Mall says.

Mwau held a 7.7 percent stake in Nakumatt until last year.

Mr. Shah who has the largest stake in the country may have parted with Sh3.1 billion to buy Mr. Mwau's stake.

Mr. Waithaka, in an affidavit, has vociferously disputed Mr. Shah's contention that the retail giant's fall was sparked by a credit crunch.