Kenya Insights

Category: Business

  • SHOCKING LOAN SCANDAL: Mwananchi Credit Slammed for Turning Sh7 Million Loan Into Sh22 Million Debt Trap

    SHOCKING LOAN SCANDAL: Mwananchi Credit Slammed for Turning Sh7 Million Loan Into Sh22 Million Debt Trap

    A Kenyan microfinance company has been caught red-handed in a brazen case of predatory lending that saw a borrower’s debt balloon from Sh7 million to a staggering Sh22 million, sparking outrage and raising serious questions about the unregulated lending practices that continue to fleece unsuspecting Kenyans.

    In the landmark case Jelangant and Another v Mwananchi Credit Ltd, the High Court delivered a crushing blow to the lender, quashing the astronomical Sh15 million interest claim and declaring the excessive charges unconscionable and unenforceable.

    The court’s decision has sent shockwaves through Kenya’s microfinance sector, exposing the dark underbelly of an industry that has long operated in the shadows.

    The shocking details of the case paint a picture of financial exploitation that would make even the most hardened shylocks blush.

    The plaintiff had diligently repaid the entire Sh7 million principal amount borrowed from Mwananchi Credit Limited.

    But instead of celebrating the repayment, the microfinance company turned around and demanded an additional Sh15 million in interest and penalties, transforming what should have been a closed file into a never-ending nightmare of debt.

    Justice George M. Khaniri, delivering the judgment in July 2023, made it clear that the in duplum rule, which protects borrowers from runaway interest charges, applies not just to banks but to all lenders, including microfinance institutions.

    The rule, embedded in Kenya’s Banking Act, states that interest on a debt should never exceed the principal amount of the loan, a protection designed to prevent exactly the kind of exploitation Mwananchi Credit attempted.

    The court heard how Mwananchi Credit, a non-deposit-taking microfinance company, had tried to wriggle out of accountability by arguing it wasn’t bound by the same rules as banks.

    The lender claimed it operated under general contract law principles and that the 10 percent monthly interest rate was a term voluntarily agreed to by the borrower.

    But the judge wasn’t buying it.

    The court found that being a lender who earns interest, Mwananchi Credit was subject to the in duplum rule, citing precedent from other cases where microfinance institutions were held to the same standard.

    The ruling represents a watershed moment for consumer protection in Kenya, where borrowers have long been at the mercy of lenders who hide behind legal loopholes to justify exorbitant charges.

    The case exposes a systematic problem in Kenya’s microfinance sector.

    Courts in Kenya have been grappling with whether the in duplum rule applies beyond banks to microfinance institutions and other non-banking entities, with some judges extending protection to all borrowers while others maintain the rule applies only to institutions specifically regulated by the Banking Act.

    This legal ambiguity has created a wild west environment where unscrupulous lenders prey on vulnerable Kenyans.

    Legal experts say the Jelangant case should serve as a wake-up call.

    The in duplum rule is widely regarded as a consumer protection mechanism that mitigates exploitative lending practices and encourages lenders to take proactive steps to recover loans in a timely manner.

    Yet many microfinance companies have brazenly ignored these protections, leaving borrowers drowning in debt.

    Mwananchi Credit is no stranger to controversy.

    Court records reveal a pattern of aggressive lending practices that have landed the company in legal hot water multiple times.

    In another case, High Court Judge Kizito Magare blocked the microlender from selling two seized lorries, noting that traders who borrowed Sh2.5 million and repaid Sh3 million were still being pursued for more money, with the judge questioning how the debt had mysteriously ballooned to over Sh9 million .

    Judge Magare was particularly scathing in his assessment, stating he was unable to fathom the mathematical permutations that caused such dramatic debt inflation, and warned against allowing microfinance companies to operate like shylocks .

    The company has also faced accusations of gangster-like repossession tactics and questionable debt calculations that leave borrowers confused and helpless.

    Despite claiming to offer some of the lowest interest rates in the market and positioning itself as a customer-friendly alternative to traditional banks, the mounting court cases tell a different story.

    Kenya’s financial sector has seen a surge in predatory practices, with the Competition Authority of Kenya reporting a 28 percent increase in consumer complaints against lenders in 2025 compared to 2024.

    The problem is particularly acute in the digital and microfinance lending space, where lack of proper regulation has allowed companies to impose hidden charges, harass borrowers, and inflate debts beyond recognition.

    Recent reforms, including the Business Laws Amendment Bill of 2025, have sought to ban harassment by microfinance and digital lenders and strengthen Central Bank of Kenya oversight . But critics argue enforcement remains weak, and borrowers continue to suffer.

    For the plaintiffs in the Jelangant case, the court victory represents justice finally served after years of fighting an uphill battle against a system that seemed stacked against them.

    The court’s decision to limit Mwananchi Credit’s recovery to only the Sh7 million principal amount sends a powerful message: predatory lending will not be tolerated, no matter how cleverly lenders try to disguise their exploitation.

    The ruling also establishes important precedent for thousands of other Kenyans trapped in similar situations.

    The court’s finding that contracts which are unconscionable, unfair, or oppressive can be refused enforcement provides a critical tool for borrowers to challenge exploitative lending terms .

    As Kenya’s microfinance sector continues to grow, providing crucial access to credit for millions locked out of traditional banking, the need for stronger regulation and enforcement has never been more urgent.

    The Mwananchi Credit case exposes the dark side of an industry that promises financial inclusion but too often delivers financial ruin.

    Consumer advocates are calling for comprehensive reforms that would extend in duplum protections explicitly to all forms of lending, close legal loopholes that allow predatory practices, and impose harsh penalties on lenders who violate consumer protection laws.

    Until such reforms are enacted and enforced, the question remains: how many more Kenyans will see their debts mysteriously triple before the government steps in to stop the bleeding?

    For now, the Jelangant ruling stands as a beacon of hope that the courts will protect borrowers from exploitation, even when the law remains murky and enforcement weak.

    But one court victory cannot fix a broken system.

    The battle against predatory lending in Kenya has only just begun.

  • Safaricom Silently Restores ‘No Expiry’ After Expose and Public Backlash

    Safaricom Silently Restores ‘No Expiry’ After Expose and Public Backlash

    Safaricom has quietly restored data allocations on its popular ‘No Expiry’ bundles following widespread customer outrage and media scrutiny over cuts that effectively doubled internet costs for millions of Kenyans.

    The telecommunications giant, which controls 63.3 percent of Kenya’s mobile market, reinstated the bundle rates on Monday after slashing data allocations by more than half starting October 22.

    The company blamed the controversial cuts on a technical glitch, a claim that has been met with skepticism given the prolonged nature of the changes.

    “It was a technical issue, and customers who got less data have been refunded the remaining amount,” a Safaricom spokesperson told the media on Monday. “The data offered now is more, especially for amounts from Sh11.”

    The changes had hit the ‘No Expiry’ packages particularly hard.

    Customers who paid Sh51 for 255 megabytes of data found themselves receiving only 102 megabytes, while Sh100 purchases dropped from 400 megabytes to just 200 megabytes.

    The Sh250 package, which previously offered one gigabyte, was slashed to 500 megabytes.

    As of Monday, restored rates showed significant improvements.

    The Sh250 package now offers 1.25 gigabytes, while Sh51 purchases have returned to their original 255 megabytes.

    The timing of the restoration, coming days after media reports exposed the cuts, has raised questions about whether the changes were indeed technical errors or a pricing strategy that backfired.

    Safaricom initially remained silent when customers began complaining on social media, only acknowledging “an issue affecting the awarding of data bundles” on October 23 after mounting pressure.

    The controversy erupted as subscribers discovered they were getting half the data they expected when topping up their accounts.

    Angry customers took to social media platform X to express frustration, with many threatening to switch to rival networks.

    Competition from Airtel Kenya, which has been offering more competitive data rates, appears to have intensified the backlash.

    Airtel currently offers one gigabyte valid for one hour at Sh15, while Safaricom’s comparable 1.2 gigabyte bundle with the same validity costs Sh20.

    For 24-hour bundles, Safaricom’s Sh20 gets customers 200 megabytes compared to Airtel’s 300 megabytes at the same price point.

    SMS notifications sent to affected customers on Sunday and Monday read: “Dear customer, the issue with your non-expiry bundles is fixed and extra bundles added. We apologise for the inconvenience.”

    The company said it is refunding remaining data to customers who purchased bundles at the reduced rates.

    The incident has highlighted concerns about Safaricom’s market dominance and accountability to consumers.

    With 49.9 million subscriptions and control of 62.8 percent of mobile broadband, the company faces minimal competitive pressure in most of its service areas.

    Mobile data has emerged as a key revenue driver for Safaricom as traditional voice services decline.

    In the six months to September, the company’s mobile data revenue rose 18.2 percent to Sh44.4 billion, surpassing voice revenue for the first time.

    Voice business recorded a 0.5 percent decline to Sh41 billion during the same period.

    Industry observers have noted the growing global trend of dynamic pricing in telecommunications, where costs are adjusted based on demand, usage patterns and network congestion.

    However, the model typically involves fluctuating prices rather than permanent reductions in service allocations at fixed price points.

    The Communications Authority of Kenya, which regulates the sector, has not issued any public statement on the matter despite its mandate to protect consumers from predatory pricing by dominant market players.​​​​​​​​​​​​​​​​

  • Kenya To Earn Less From Turkana Oil Deal As Govt Exempts Gulf Energy From Taxes

    Kenya To Earn Less From Turkana Oil Deal As Govt Exempts Gulf Energy From Taxes

    The Kenyan government has granted Gulf Energy sweeping tax exemptions and increased cost-recovery provisions for the long-delayed Turkana oil project, potentially reducing state revenues from the country’s first commercial crude production by hundreds of millions of dollars.

    Under amendments to the production-sharing agreement submitted to parliament last week, Gulf Energy will be exempted from paying value-added tax, withholding taxes and import levies on goods and services used in developing the South Lokichar basin.

    The changes remove obligations that previously required developers to pay 16 per cent VAT, 5 per cent and 5.625 per cent withholding tax on local and imported goods respectively, plus a 2 per cent railway development levy and a 2.5 per cent import declaration fee.

    The government will take home a smaller share of revenues from Turkana’s oil project following an amendment that raises Gulf Energy’s cost-recovery limit to 85 per cent of annual crude production, an increase from the previous 65 per cent agreement in the initial contract with Tullow Oil.

    The modification means Gulf Energy can recoup significantly more of its petroleum costs before profit-sharing with the state begins.

    The amendments come after Energy and Petroleum Cabinet Secretary Opiyo Wandayi confirmed that his ministry has approved the Field Development Plan for the project , which now requires parliamentary ratification under Kenya’s constitution.

    Opiyo Wandayi
    Energy and Petroleum CS Opiyo Wandayi

    The approved development will require an estimated $6.1 billion investment over a 25-year contract period , according to the energy ministry.

    The revisions represent a substantial shift from the original terms negotiated when British oil explorer Tullow Oil held the blocks. Tullow had struggled for more than a decade to advance the project after discovering commercially viable reserves in 2012, facing persistent challenges around financing infrastructure including a heated pipeline to transport crude from landlocked Turkana to the Mombasa coast for export.

    The sale to Gulf Energy, finalised in July 2025, closed a turbulent chapter for Tullow, which received an initial payment of $40 million under the sale agreement with two additional payments of $40 million each due in 2026 and 2028.

    TotalEnergies and Africa Oil Corporation, Tullow’s former partners, had withdrawn from the project in 2023 when financing for the multi-billion-dollar plan collapsed.

    The contract amendments also include changes to where crude oil is lifted for marketing purposes. Previously, the government’s share of profit oil was to be lifted at Mombasa, but the revised agreement designates Turkana as the lifting point, effectively shifting transportation responsibilities and associated costs.

    According to the amended production-sharing contract, Kenya’s share of profit will start at 50 per cent in the initial stages and increase to 75 per cent at peak production where output is expected at more than 150,000 barrels per day.

    The agreement includes a windfall tax provision of 26 per cent triggered when oil prices reach at least $50 per barrel.

    The energy ministry estimates recoverable reserves at 326 million stock-tank barrels, with oil initially in place estimated at up to 4 billion barrels.

    Phase One aims to produce 20,000 barrels per day, increasing up to 50,000 barrels per day under Phase Two, with Gulf Energy planning first oil production by December 2026 and full production expected by 2032.

    Leparan Morintat, chief executive of the state-owned National Oil Corporation of Kenya, said the amendments were meant to harmonise provisions in the two blocks’ agreements and help the project move forward faster.

    Under the revised terms, Kenya’s back-in rights for the project are set at 20 per cent for both blocks, to be held by the state oil company.

    Gulf Energy, a Nairobi-based energy trading company acquired by French multinational Rubis in 2019 for 16.4 billion shillings, now holds complete control of Block T7 following years of partner exits.

    The company operates primarily in downstream petroleum marketing across East Africa.

    The parliamentary ratification process is expected to be completed within 90 days. Under Kenya’s Petroleum Act, the field development plan will be deemed ratified if parliament fails to reach a decision within that timeframe.

    The government must also incorporate public views before making a final determination.

    Industry observers have raised concerns that the enhanced cost-recovery ceiling and tax exemptions may substantially diminish Kenya’s take from the project during its critical early years when Gulf Energy will be recovering its capital investments.

    With the higher 85 per cent cost-recovery threshold, the company could capture the vast majority of early production revenues before any profit-sharing occurs, potentially delaying meaningful returns to the state.

    Kenya has waited nearly 15 years to realise commercial production from the Turkana oil discovery.

    The government views the project as strategically important for economic development and energy security, particularly given the country’s reliance on imported petroleum products.

    However, the concessions granted to advance the project highlight the difficult trade-offs developing nations face when attempting to attract investment in capital-intensive extractive industries.

  • How Dinesh Construction Engaged In Tax Fraud Using ‘Missing Trader’ Scheme

    How Dinesh Construction Engaged In Tax Fraud Using ‘Missing Trader’ Scheme

    Veteran contractor caught in elaborate scheme involving ghost suppliers and unexplained millions

    For over four decades, Dinesh Construction Limited has built its reputation erecting offices, hospitals, and banking halls across Kenya.

    But behind the concrete and steel facade, the company was allegedly constructing something far more sinister: a sophisticated tax evasion scheme that would ultimately cost it Sh773 million.

    The High Court has now blown the lid off the elaborate fraud, reinstating the massive tax bill after the company tried to wiggle out through the Tax Appeals Tribunal.

    The judgment exposes how one of Kenya’s established building contractors allegedly manipulated the tax system through phantom suppliers and mysterious bank deposits that investigators could not trace.

    At the heart of the scam lies the notorious missing trader scheme, a tax fraud racket that has been bleeding Kenya’s coffers of billions of shillings monthly.

    The scheme is deceptively simple yet devastatingly effective.

    Companies create fictional business transactions with ghost suppliers who exist only on paper, issue invoices for goods that were never delivered, and then claim massive VAT refunds from the Kenya Revenue Authority.

    KRA’s forensic audit of Dinesh Construction’s operations between 2016 and 2021 uncovered a web of suspicious transactions that should alarm every honest taxpayer in this country.

    Investigators flagged a staggering Sh689 million in purchases allegedly made from suppliers who turned out to be missing traders.

    These phantom entities issued invoices but investigators found no evidence they ever supplied actual construction materials or services.

    The company also could not explain Sh187 million in bank deposits that appeared in its accounts like magic.

    The money did not match declared income, raising red flags about hidden revenue streams and systematic underreporting.

    When pressed for documentation proving these transactions were legitimate, Dinesh Construction came up short.

    No delivery notes. No purchase orders. No transport records. Just paper invoices and electronic tax register receipts that proved absolutely nothing about whether any real goods changed hands.

    The initial audit assessment hit Dinesh Construction with a Sh1.1 billion tax liability.

    After negotiations, this was reduced to Sh773 million in 2022.

    But rather than pay up, the company dragged KRA to the Tax Appeals Tribunal, claiming it was being unfairly targeted and could not be held responsible for the tax compliance failures of its suppliers.

    The Tribunal bought this argument.

    In June last year, it sided with Dinesh Construction, slashing the assessment dramatically and dismissing the missing trader allegations as unproven.

    The Tribunal declared portions of the tax demand were time-barred and accepted the company’s claim that having invoices and ETR receipts was sufficient proof of legitimate transactions.

    KRA’s banking analysis methodology was also questioned, giving the contractor what appeared to be a major victory.

    But the taxman was not backing down. KRA appealed to the High Court, arguing that the Tribunal had ignored binding legal precedents and set a dangerous standard that would make it easier for tax cheats to operate with impunity.

    The stakes were enormous, not just for this case but for the entire fight against missing trader fraud that has become Kenya’s most pernicious tax evasion scheme.

    The High Court agreed with KRA in a judgment that should send shivers down the spines of companies engaged in similar schemes.

    The judge tore apart Dinesh Construction’s defense piece by piece, establishing stricter evidentiary standards that will make it much harder for businesses to claim VAT deductions without proper documentation.

    The ruling was brutal in its assessment of what the company failed to produce.

    An invoice alone cannot prove its own validity when the supplier’s existence is disputed, the court declared.

    Commercial transactions involving hundreds of millions of shillings must leave verifiable footprints beyond paper invoices.

    A prudent construction business dealing in materials must maintain local purchase orders, delivery notes, weighbridge tickets, stock records, and site usage logs.

    Dinesh Construction had none of these despite claiming to have received massive quantities of construction materials.

    The company argued it was not legally required to keep such elaborate records or police its suppliers.

    The court rejected this defense as legally unsustainable under the Tax Procedures Act and VAT Act, which clearly mandate proper record keeping to ascertain tax liability.

    On the statute of limitations argument that the Tribunal had accepted, the High Court found the lower body had simply miscalculated.

    The five-year assessment window actually expired on December 14, 2022, the exact same day KRA issued its final demand. Taxpayers cannot benefit from their own delays in filing returns to avoid scrutiny, the judge observed sharply.

    Most significantly, the judgment established that once KRA presents credible evidence of missing trader fraud, the burden shifts entirely to the taxpayer to prove transactions were legitimate.

    The right to deduct input tax under the VAT Act is premised on a valid supply actually occurring. If the supplier is a missing trader who never bought or possessed the goods they purportedly sold, then no supply took place in law.

    The transaction is a fiction.

    If a company cannot prove through delivery notes and transport logs that it actually received goods from specific suppliers, it cannot deduct the input VAT, regardless of whether it holds a tax invoice.

    The Tribunal’s approach, the judge concluded, would make it an unwitting facilitator of the very fraud the tax system seeks to prevent.

    Regarding the mysterious Sh187 million in bank deposits, the court upheld KRA’s banking analysis method as legally sound.

    The judge dismissed Dinesh Construction’s explanation that these were inter-account transfers or director loans, noting the complete absence of supporting documentation like bank reconciliations or loan agreements that any legitimate business would maintain.

    The missing trader scheme has become an epidemic in Kenya. KRA estimates it costs the exchequer Sh2.5 billion monthly.

    In June this year, authorities placed over 5,000 businesses on a VAT Special Table, freezing their ability to file returns as part of a massive crackdown.

    The taxman suspended online VAT registration entirely, reverting to a manual system requiring physical verification after discovering ghost traders had exploited the digital process.

    An internal KRA audit revealed over 4,400 suspected missing traders in the system.

    Some 2,080 traders sent invoices totaling Sh19.69 billion but filed nil or no VAT returns, while their supposed customers claimed purchases worth Sh13.64 billion, resulting in potential VAT losses of Sh2.14 billion.

    Out of approximately 90,000 VAT obligation cases under review, over 20,000 were found to be inactive taxpayers, raising massive red flags about systematic fraud.

    The scheme works like a well-oiled criminal enterprise.

    Fraudsters register multiple companies using stolen identities, sometimes trapping innocent Kenyans including domestic workers in tax debt.

    These shell companies issue compliant-looking invoices for fictitious supplies. Real businesses then use these invoices to claim VAT deductions.

    The missing traders collect the VAT from their accomplices but disappear without remitting anything to KRA.

    Meanwhile, the legitimate-looking companies get tax refunds based on phantom transactions.

    KRA has been forced to take extreme measures. In May, the authority removed 475 officials from processing VAT applications, representing 74 percent of the team handling registrations.

    Workers at the tax agency have been accused of colluding with evaders and taking bribes. The purge was necessary to restore integrity to a system that was clearly compromised from within.

    The Dinesh Construction judgment is a watershed moment in this fight.

    It establishes clear legal standards that close loopholes missing traders have been exploiting. Companies can no longer hide behind flimsy invoices when KRA raises credible fraud concerns.

    They must produce hard evidence that goods actually moved, that suppliers were real entities, that transactions had commercial substance beyond paper shuffling.

    For Dinesh Construction, a company that has been building structures in Kenya since 1971, the verdict is a devastating blow to its reputation.

    The firm is registered with the National Construction Authority in the highest class and holds prestigious memberships.

    It has worked on major projects across the country.

    Yet despite its pedigree, it could not produce basic documentation to prove the legitimacy of hundreds of millions in claimed purchases.

    The company can still appeal to the Court of Appeal.

    But the evidence presented paints a damning picture of a contractor that either engaged directly in fraud or was spectacularly negligent in its business practices to the point of facilitating a massive tax evasion scheme. Either scenario raises serious questions about corporate governance and internal controls.

    This case should serve as a warning to other businesses tempted to game the system. The days of using missing traders to inflate costs and reduce tax bills are numbered. KRA is deploying computer forensics specialists, mining data from taxpayers’ systems, and establishing strict verification protocols.

    The taxman is also working with international partners to combat carousel fraud, where chains of circular transactions create the illusion of legitimate trade.

    The missing trader epidemic has cost Kenya dearly at a time when the country desperately needs every shilling of revenue to fund development and services.

    When companies like Dinesh Construction allegedly evade hundreds of millions in taxes, honest taxpayers bear the burden.

    The informal sector struggles while well-connected firms manipulate the system. Public services suffer because the money that should build roads, hospitals, and schools disappears into private pockets.

    The High Court has drawn a line in the sand.

    Tax fraud will no longer be tolerated, no matter how established the company or how sophisticated the scheme. Businesses must maintain proper records, conduct due diligence on suppliers, and prove the commercial reality of their transactions. Anything less will be treated as the fraud it is.

    For Dinesh Construction, the Sh773 million bill now looms large. The company must decide whether to pay what it owes or continue fighting in higher courts.

    But one thing is crystal clear from this judgment: the era of missing trader impunity is ending, and those who built empires on ghost suppliers are about to face a brutal reckoning.

  • Spanish Firm Unable To Raise Sh185 Million Security Cost In Sh10 Billion Debt Case With Ketraco

    Spanish Firm Unable To Raise Sh185 Million Security Cost In Sh10 Billion Debt Case With Ketraco

    A high-stakes battle between Kenya Electricity Transmission Company and a Spanish contractor has taken a dramatic turn after it emerged the foreign firm could not raise the Sh185 million security for costs that Ketraco demanded in the Sh10 billion debt saga.

    The revelation came as the High Court dismissed Ketraco’s application, ruling that the request was nothing more than an attempt to stall an already long-delayed liquidation process.

    The case traces back to 2016 when Ketraco terminated two EPC contracts awarded to Spanish engineering giant Instalaciones Inabensa for the construction of a power line and a substation.

    The contractor moved to arbitration, and in 2019, the tribunal found Ketraco in breach and awarded Inabensa €37 million plus interest and costs, an amount that has since ballooned to more than €69 million and Sh195 million.  

    Ketraco exhausted every possible legal route to overturn the award.

    It lost at the High Court, failed at the Court of Appeal, and hit a dead end at the Supreme Court.

    With nowhere left to run, the State corporation now faces the threat of liquidation filed by C.A. Infraestructuras T & I SLU, the company that took over the decree through a 2023 deed of subrogation.  

    Cornered, Ketraco asked the court to compel the Spanish firm to deposit Sh185 million as security, arguing that the company has no known assets in Kenya and therefore posed a risk if the liquidation petition collapses.

    But the court flatly rejected the plea, pointing out that a creditor holding such a colossal decree cannot be described as a litigant who is unable to meet a potential costs order.

    It ruled that demanding more money from a party already owed billions would be a clear injustice.  

    The judge noted that the Spanish contractor had demonstrated it is a financially sound international player and that Ketraco presented no evidence to the contrary.

    The court added that should Ketraco eventually win and be awarded costs, the amount can be offset against the massive decretal sum the creditor is already entitled to.  

    This latest blow piles more pressure on the power transmission agency, which is already grappling with billions in unresolved claims including payouts tied to land disputes and terminated contracts.

    The Sh10 billion award now hangs over Ketraco like a guillotine, raising questions about the State’s exposure to costly disputes in major infrastructure projects.

    If the liquidation petition proceeds successfully, Ketraco could become one of the most high-profile State entities to face such a consequence arising purely from a commercial dispute that dragged on for nearly a decade.

  • Centum’s Two Rivers Gamble Turns Sour as Mounting Losses Test Investor Patience

    Centum’s Two Rivers Gamble Turns Sour as Mounting Losses Test Investor Patience

    Investment giant’s flagship development bleeds cash as ambitious SEZ project drains resources, raising questions about strategic direction

    Centum Investment Company finds itself in an increasingly uncomfortable position as losses at its crown jewel property development continue to spiral, threatening to undermine confidence in what was once hailed as East Africa’s most ambitious mixed-use project.

    The investment firm’s latest financial results paint a troubling picture of Two Rivers Development, with the subsidiary’s losses widening to Sh90.68 million in the six months to September 2025, up from Sh67.7 million in the comparable period.

    More alarming still, the Two Rivers Special Economic Zone saw its losses more than double to a staggering Sh584.5 million from Sh288.04 million, casting a long shadow over Centum’s entire portfolio.

    For investors who have watched Centum’s share price languish in recent years, the persistent red ink at Two Rivers represents a bitter pill.

    The development, which sprawls across prime land in Nairobi’s Ruaka area and was supposed to generate steady returns from its mall, residential units, and now the SEZ, has instead become a cash furnace that shows little sign of turning profitable.

    The scale of the SEZ’s losses is particularly striking.

    At more than half a billion shillings for just six months, the project is burning through capital at an alarming rate, with Centum attributing the hemorrhaging to finance costs on the development loan for the first office tower, along with setup and establishment expenses that accounting rules require be recognized immediately.

    Chief Executive James Mworia and his team find themselves caught between the demands of international financial reporting standards and the harsh reality of investor expectations.

    While IFRS may dictate that all operating expenses be recognized upfront even as revenue remains deferred until projects complete, investors are growing restless watching quarter after quarter of losses pile up.

    The utility subsidiaries under Two Rivers Development add another layer of concern.

    Power and water operations that were meant to serve the development and generate additional income streams are operating well below the utilization levels needed to break even.

    This raises uncomfortable questions about the original feasibility studies and whether projections for tenant uptake and residential occupation were overly optimistic.

    Centum insists there is light at the end of the tunnel, claiming the SEZ is at an advanced stage of concluding the sale of its office tower to a US dollar denominated Real Estate Investment Trust.

    Such a transaction, the firm says, would settle the development loan, recover setup costs, eliminate finance costs, and release capital for the next tower.

    Yet investors have heard promises before.

    The real estate subsidiary Centum Re also posted losses of Sh88.33 million, albeit narrowed from the prior period, with the company blaming a revenue expense mismatch caused by accounting treatment.

    The explanation that current sales will only be recognized in future periods when completion and payment occur offers cold comfort to shareholders watching their equity erode.

    The broader Centum group managed to narrow its overall net loss to Sh326.14 million from Sh346.64 million, but this modest improvement came largely from a Sh296.71 million tax credit rather than operational excellence.

    Strip away the accounting benefits, and the picture is considerably bleaker, with pre-tax losses widening more than threefold to Sh622.85 million.

    Four of Centum’s six business units posted losses in the period, underscoring how deeply the malaise runs.

    Even the profitable segments saw declining performance, with financial services earnings dropping a third to Sh53.74 million and investment operations falling 31.6 percent to Sh388.9 million.

    For a company that once commanded a premium valuation as the Berkshire Hathaway of East Africa, the sustained underperformance is humbling.

    Two Rivers was supposed to be transformative, creating a new urban hub that would generate returns for decades.

    Instead, it has become an albatross, with the SEZ losses alone threatening to overwhelm profits from other divisions.

    The central question facing Centum now is whether management can execute the promised tower sale and stem the bleeding before investor patience runs out entirely.

    With the company owning 60 percent of Two Rivers Development, any continued deterioration flows directly to the parent’s bottom line.

    Market watchers note that while property development inherently involves upfront losses before projects mature and generate returns, the scale and duration of Two Rivers’ red ink suggests something more fundamental may be amiss.

    Either the business model needs rethinking, the assets need to be monetized more aggressively, or management needs to level with shareholders about realistic timelines for profitability.

    As Centum navigates these choppy waters, one thing is clear: the Two Rivers dream that promised to reshape Nairobi’s property landscape has turned into a nightmare for investors who are still waiting for their ship to come in.

    Until the losses reverse course, questions about strategic direction and capital allocation will only grow louder.​​​​​​​​​​​​​​​​

  • Blow To Paul Wanderi As London Court Finds No Fraud In SportPesa Share Dilution, Ordered To Pay Sh 375 Million

    Blow To Paul Wanderi As London Court Finds No Fraud In SportPesa Share Dilution, Ordered To Pay Sh 375 Million

    London, November 30, 2025

    In a major setback for Kenyan businessman Paul Wanderi Ndungu, the High Court of Justice in England and Wales has dismissed his claims of fraud and conspiracy in the dilution of his shares in SportPesa Global Holdings Limited, now known as SPG Limited.

    The ruling, delivered by Mr Justice Edwin Johnson on November 18, 2025, found no evidence of wrongdoing by the company or its directors, and ordered Ndungu to pay costs amounting to approximately Sh375 million.

    The nearly 190-page judgment marks the culmination of a protracted legal battle and clears SPG Limited and its co-defendants of all allegations.

    Ndungu, a founding shareholder and former non-executive chairman of the company, had accused the firm and several individuals of orchestrating a scheme to unlawfully dilute his 17 per cent stake to 0.85 per cent through three share allotments between 2019 and 2022.

    He sought compensation under the Companies Act 2006 for breaches of pre-emption rights and relief for unfair prejudice, claiming the actions were part of a deliberate plot to sideline him.

    Justice Johnson rejected these assertions outright. He concluded that the share allotments were conducted lawfully and that Ndungu’s failure to participate was his own choice, despite being given opportunities to do so.

    The court emphasised that there was no proof of fraud, forgery, or conspiracy among the defendants, describing Ndungu’s evidence as insufficient and, in parts, unreliable.

    Background to the dispute

    SportPesa, one of Kenya’s most prominent betting brands, has been at the centre of multiple shareholder disputes since its rapid rise in the East African gaming market.

    Founded in 2014 through Pevans East Africa Limited, the company leveraged widespread use of mobile money services like M-Pesa to revolutionise sports betting in Kenya.

    However, the company’s fortunes shifted dramatically in July 2019 when the Kenyan Betting Control and Licensing Board suspended Pevans’ gaming licence amid a government crackdown on betting firms over tax disputes and regulatory compliance.

    This suspension forced SportPesa to halt operations in Kenya, leading to significant financial strain. Against this backdrop, SPG Limited, the UK-registered holding company for SportPesa’s global operations, sought to raise capital through new share issues.

    The claims

    Ndungu’s lawsuit centred on these capital-raising efforts.

    He argued that the allotments violated Sections 561 and 562 of the Companies Act 2006, which require existing shareholders to be offered new shares on a pro-rata basis.

    In his claim, filed in January 2022, Ndungu alleged that the company’s directors, Ivaylo Petev Bozukov and Kalina Lyubomirova Karadzhova, knowingly authorised the breaches.

    He further implicated major shareholders Guerassim Nikolov, Gene Grand, and Naogen Investment Inc, claiming they conspired to increase their own holdings at his expense.

    According to court documents, the first allotment occurred in late 2019, shortly after the licence suspension, when SPG Limited issued shares to raise funds for IT infrastructure and international expansion.

    Subsequent allotments in 2020 and 2022 further diluted his stake, allegedly allowing Nikolov and Grand to boost their shares from 21 per cent and 22 per cent to 46 per cent and 29.88 per cent, respectively.

    Court’s findings

    Justice Johnson dissected these claims methodically. He noted that the company’s board had held meetings in October and November 2019 where the need for capital was discussed, driven by the Kenyan licence crisis and expansion into markets including Italy, Tanzania, South Africa, and Russia.

    The court found that Ndungu was aware of these discussions but chose not to invest.

    On the forgery allegations, which formed a key part of Ndungu’s case, the judge was particularly scathing. Ndungu had accused the defendants of fabricating documents, including board minutes and share offer letters.

    Justice Johnson dismissed the expert evidence as flawed, ruling that no forgeries had occurred.

    The court also addressed the unfair prejudice claim under Section 994 of the Companies Act, examining 11 grounds raised by Ndungu. Each was rejected.

    Justice Johnson stated that the affairs of SPG Limited had not been conducted in a manner unfairly prejudicial to Ndungu, emphasising that as a minority shareholder, Ndungu had the right to participate in the capital raises but failed to do so, and that the company’s actions were commercially justified.

    The defendants, represented by DLA Piper UK LLP and Mishcon de Reya LLP, welcomed the ruling. In a statement released shortly after the judgment, SportPesa described it as a vindication of their governance practices.

    For Ndungu, the defeat is compounded by the costs order.

    The court awarded indemnity costs to the defendants, estimated at £2.25 million, approximately Sh375 million, reflecting the judge’s view that Ndungu’s claims were speculative and poorly substantiated. This amount covers legal fees for a trial that spanned 14 days across May and July 2025.

    The case has roots in SportPesa’s turbulent history in Kenya. After the 2019 licence suspension, Pevans East Africa ceased operations, leading to layoffs.

    By 2020, the brand relaunched under Milestone Games, a new entity, amid accusations from Ndungu that the trademark transfer was fraudulent, a claim echoed in separate Kenyan proceedings.

    Experts in corporate law say the ruling underscores the challenges minority shareholders face in proving unfair prejudice in UK courts, where commercial necessity often trumps personal grievances.

    Ndungu’s legal team, Jury O’Shea LLP, has not indicated whether he will appeal.

    Sources close to him suggest he may pursue remedies in Kenyan courts, where parallel disputes over trademarks and assets continue.

    The company, which now operates in over a dozen countries and reported revenues exceeding Sh10 billion in 2024, can move forward without the overhang of litigation.

  • Trick Out: Safaricom Silently Slashed Data Bundles By Half and Doubled Cost For Customers

    Trick Out: Safaricom Silently Slashed Data Bundles By Half and Doubled Cost For Customers

    In what can only be described as corporate highway robbery, Safaricom has pulled off one of the most audacious consumer rip-offs in Kenya’s telecommunications history.

    Over the weekend, while Kenyans were winding down, the country’s largest telco was busy executing a stealth operation that would see millions of subscribers wake up to data bundles that had been slashed by more than half, effectively doubling the cost of internet access overnight.

    The move is brazen, calculated, and reeks of the kind of impunity that comes from knowing you control over 62 percent of the mobile broadband market.

    When you’re that big, apparently, you can get away with anything, including treating your customers like they’re too stupid to notice when you’ve just picked their pockets.

    Let’s be clear about what happened here.

    Safaricom didn’t send out a press release.

    They didn’t issue a statement.

    There was no customer notification, no email, no SMS warning. They simply went into their systems and chopped the data allocations in half, hoping nobody would notice until it was too late.

    This is the telecommunications equivalent of a thief in the night, except this thief has a corporate logo and a customer service Twitter account.

    The numbers tell a story of pure greed.

    Under Safaricom’s so-called ‘No Expiry’ packages, which were marketed as offering indefinitely valid bundles at fixed rates, customers who paid 51 shillings used to get 255 megabytes of data.

    Now? They get a measly 102 megabytes.

    That’s a reduction of 60 percent. For 100 shillings, you now get 200 megabytes instead of the previous allocation. Five hundred megabytes now costs 250 shillings. Do the math. That’s not a price adjustment. That’s not inflation. That’s not market forces. That’s outright exploitation.

    And before Safaricom’s PR machinery starts spinning tales about dynamic pricing models and artificial intelligence optimization, let’s cut through that nonsense.

    Dynamic pricing is supposed to work both ways.

    It means prices go up during peak demand and down during off-peak hours. It doesn’t mean you permanently slash what customers get while keeping the price the same. That’s not dynamic pricing. That’s called a scam dressed up in corporate speak.

    The telco’s response to customer complaints has been nothing short of insulting.

    When one customer complained on Sunday about receiving only 600 megabytes for 300 shillings, Safaricom had the audacity to claim there was an “issue affecting the awarding of data bundles” and that “a resolution is underway.”

    Four days later, as of the publication of this story, those reduced bundles are still in place.

    So either Safaricom’s definition of “underway” is very different from the rest of ours, or that statement was simply a lie designed to buy time and hope the story would die down.

    What makes this particularly galling is the timing. Safaricom just posted an 18.2 percent increase in mobile data revenue for the six months ending September, raking in 44.4 billion shillings.

    Mobile data has now overtaken voice calls as their primary revenue driver, bringing in more than the 41 billion shillings from voice services.

    Safaricom data

    The company is swimming in profits, expanding 5G coverage to all counties, and investing billions in infrastructure.

    And yet, somehow, they’ve decided this is the perfect time to squeeze even more money out of ordinary Kenyans who are already struggling with the cost of living.

    Let’s talk about what this means for the average Kenyan.

    In a country where millions rely on mobile data for everything from running small businesses to accessing education and healthcare services, doubling the cost of data is not just inconvenient.

    It’s an attack on economic opportunity. It’s a barrier to digital inclusion.

    It’s yet another way the corporate elite have decided to extract wealth from people who can least afford it.

    The comparison with Airtel is instructive.

    While Safaricom charges 20 shillings for 200 megabytes valid for 24 hours, Airtel offers 300 megabytes for the same price and duration.

    Airtel’s 50 gigabyte monthly bundle costs 3,000 shillings, while Safaricom’s 25 gigabyte monthly bundle goes for 2,000 shillings.

    The price per gigabyte tells you everything you need to know about who’s gouging customers and who’s trying to compete fairly.

    But here’s the real kicker.

    Safaricom holds 34.3 percent of the fixed internet market and a whopping 62.8 percent of mobile broadband as of June 2025, according to the Communications Authority of Kenya.

    With that kind of market dominance, they’re not just a service provider.

    They’re essentially a public utility masquerading as a private company. And public utilities, even private ones, have a responsibility not to abuse their market position.

    This is where the Communications Authority of Kenya needs to wake up and do its job.

    The CA is supposed to protect consumers from exactly this kind of predatory behavior. They’re supposed to ensure fair pricing and prevent abuse of dominant market position.

    So where are they? Why has there been no statement? No investigation? No demand for explanations? Or are they too busy rubber-stamping whatever Safaricom wants to do?

    The Competition Authority of Kenya should also be paying attention.

    When a company controls more than 60 percent of a market and then suddenly doubles prices through a backdoor reduction in service, that’s abuse of dominance.

    That’s anti-competitive behavior.

    That’s exactly what competition law is supposed to prevent. But will they act, or will this be yet another example of regulatory capture where the big boys get to do whatever they want?

    Safaricom’s silence on the matter speaks volumes. When contacted for comment, they simply didn’t respond. No explanation. No justification. No apology. Just radio silence. Because why bother explaining when you know you can get away with it? Why engage with customers when you’ve got them trapped in your network with nowhere else to go?

    This is not how a responsible corporate citizen behaves. This is not how a company that claims to care about digital inclusion operates.

    This is the behavior of a monopolist that has forgotten that its license to operate comes from serving the public interest, not just maximizing shareholder returns.

    Kenyan consumers need to wake up and demand accountability.

    Every customer who has been affected by these stealth cuts should file a complaint with the Communications Authority.

    They should take to social media and make noise until Safaricom is forced to respond. They should consider voting with their wallets and switching to competitors where possible.

    And regulators need to do their jobs. The CA and the Competition Authority need to launch immediate investigations. They need to demand answers. They need to determine whether this constitutes abuse of market dominance. And if it does, they need to impose penalties severe enough to make Safaricom think twice before trying something like this again.

    Because if Safaricom can get away with this, what’s next? What other services will they quietly degrade while maintaining prices? How much more can they squeeze from customers before someone in authority decides enough is enough?

    The telecommunications sector is too important to Kenya’s economy and too critical to ordinary Kenyans’ lives to be left to the whims of a corporate behemoth that treats its customers with such contempt.

    Safaricom needs to reverse these cuts immediately, compensate affected customers, and commit to transparent communication about any future pricing changes.

    Anything less is unacceptable. And if they won’t do it voluntarily, then it’s time for the government to step in and make them.

  • KWS Defends Ritz-Carlton Camp, Says It’s Not Blocking Wildebeest Migration Routes

    KWS Defends Ritz-Carlton Camp, Says It’s Not Blocking Wildebeest Migration Routes

    The Kenya Wildlife Service has dismissed claims circulating on social media that the Ritz-Carlton Safari Camp is obstructing wildebeest migration routes and river crossings in the Maasai Mara National Reserve.

    In a statement released on Thursday, KWS said the luxury camp is located within a designated tourism investment low-use zone as outlined in the Maasai Mara National Reserve Management Plan 2023-2032. The agency emphasized that the zonation was established through comprehensive scientific assessments, ecological sensitivity analyses and spatial planning frameworks developed jointly by national and county governments.

    The statement comes amid growing public concern over the impact of tourism infrastructure on wildlife corridors in one of Kenya’s most important conservation areas. The Maasai Mara is home to the world-renowned wildebeest migration, recently recognized by the World Book of Records and World Tourism Market in London as the world’s greatest annual terrestrial wildlife migration and Africa’s leading tourism destination.

    Wildebeest migration.
    Wildebeest migration.

    KWS said it has mapped wildebeest movements in the Maasai Mara using more than two decades of GPS collar data collected from migratory wildebeest between 1999 and 2022. The data, which includes GPS tracks from over 60 collared animals representing herds of between 2,000 and 100,000 wildebeest, indicates that the entire reserve serves as a general dispersal area.

    According to KWS, the long-term monitoring data shows that migrating wildebeest utilize the entire breadth of the Kenya-Tanzania border within the reserve, approximately 68 kilometers wide, without following a specific preferred route or corridor.

    The agency noted that the Maasai Mara is served by the Mara River, Sand River and Talek River, along which lodges and campsites have been established. Wildlife including wildebeest and zebra have historically moved across these rivers without serious incidents.

    KWS pointed out that along the Sand River alone, there are five permanent safari camps and over two seasonal camps, none of which has received negative publicity similar to what the Ritz-Carlton camp is currently facing.

    The wildlife agency said the images and narratives circulating online relate to historical events that were addressed in previous years around 2018 and 2020. It suggested the materials are outdated, misleading or presented without proper context, and may reflect competing commercial interests surrounding tourism investments in the Mara.

    KWS assured the public that all ecological, environmental and regulatory requirements were thoroughly met and validated before the Ritz-Carlton Safari Camp was approved. The agency emphasized that every tourism investment within parks, reserves and sanctuaries undergoes stringent environmental assessment to ensure alignment with conservation priorities.

    The government has recently demonstrated its commitment to protecting wildlife corridors through Cabinet approval to secure the Nairobi National Park-Athi-Kapiti wildlife corridor, among other initiatives. KWS said this policy direction highlights the government’s resolve to safeguard all existing wildlife corridors, including those within the wider Maasai Mara ecosystem.

    The agency called on Kenyans to rely on verified and official information and to remain patriotic in providing accurate information about the country. It reaffirmed its dedication to preserving the wildebeest migration for current and future generations while striking a balance between responsible tourism investment, ecological protection and community socio-economic advancement.​​​​​​​​​​​​​​​​m

    Ritz-Carlton Safari Camp
    Ritz-Carlton Safari Camp
  • Binance Sued Over Terror Fund Claims

    Binance Sued Over Terror Fund Claims

    Binance and its founders, including billionaire Changpeng Zhao, face a US lawsuit alleging the cryptocurrency platform facilitated millions of dollars to terrorist organisations such as Hamas and Hezbollah.

    The suit, filed by victims or families of the 7 October 2023 attacks in Israel, comes weeks after President Donald Trump pardoned Zhao, who had pleaded guilty in 2023 to money laundering charges.

    Binance declined to comment on the case but stated it complies fully with internationally recognised sanctions laws.

    The lawsuit claims the firm knowingly allowed the transfer of over $1 billion to accounts linked to US-designated foreign terrorist organisations, including $50 million sent after the 7 October attacks and at least two transfers originating from the US.

    In November 2023, Binance had pleaded guilty and agreed to pay more than $4 billion in penalties to settle prior US money laundering and sanctions violation charges. It pledged to strengthen its anti-money laundering and sanctions compliance programmes.

    Binance Sued Over Terror Fund Claims. Credit: Shutterstock.
    Binance Sued Over Terror Fund Claims. Credit: Shutterstock.

    However, the lawsuit alleges that Binance continued to screen only outbound transfers, enabling terrorists and criminals to deposit and move vast sums without scrutiny. The complaint claims the company structured itself as a haven for illicit activity and has not fundamentally changed its business model.

    The plaintiffs are seeking financial damages to be determined in a jury trial.

    A Binance spokesperson said the company had improved its compliance systems and that illicit activity represented a tiny fraction of total transactions. The firm reaffirmed its commitment to working with regulators, law enforcement, and users to maintain the integrity of the global crypto ecosystem.

    The lawsuit follows controversy over Trump’s pardon of Zhao, known as “CZ”, which Democrats warned could signal that cryptocurrency executives and white-collar criminals can evade consequences if they benefit the former president financially.

  • Property Laws You Should Know Before Investing in Real Estate in Kenya

    Property Laws You Should Know Before Investing in Real Estate in Kenya

    By Joshua Ooko

    Investing in real estate in Kenya remains one of the most reliable long-term strategies for building wealth, but it demands a clear understanding of the legal framework that governs land and property ownership. Kenya’s property laws are anchored in the Constitution, the Land Act, the Land Registration Act, and the Physical and Land Use Planning Act. Knowing how these laws work ensures that your investment is safe, compliant, and protected from future disputes.

    Property Ownership in Kenya

    Property ownership is the foundation of every real estate investment. Land in Kenya is categorised as public, private, or community property, and any investor must begin by verifying the ownership status through an official search at the Ministry of Lands. Ownership may take the form of freehold, leasehold, sectional titles, or tenancy at will. Freehold owners enjoy absolute rights to the property, while leasehold owners have rights for a specified period, usually up to 99 years. Sectional titles apply to individual units within a larger development, such as apartments, and tenancy at will gives temporary occupation at the discretion of the landlord. Non-citizens are only allowed to hold land on a leasehold basis. Understanding these categories ensures that your ownership rights align with your investment goals.

    The Legal Process of Property Transactions

    All property transactions in Kenya follow a formal process meant to safeguard both the buyer and the seller. The process begins with a title search to establish the legitimacy of the ownership, uncover any encumbrances, and confirm that the seller has the authority to dispose of the land. A sale agreement is then drafted and reviewed by a lawyer to ensure the terms are clear and legally enforceable. After signing, the buyer must pay stamp duty, which is based on the property’s location and value. The transaction concludes with the transfer and registration of ownership at the Land Registry. Following these steps carefully protects investors from fraud, disputes, and incomplete transfers.

    Tax Obligations for Property Investors

    Real estate investments come with several tax obligations administered by the Kenya Revenue Authority. These include stamp duty, capital gains tax, rental income tax, and either land rates or land rent depending on whether the property is freehold or leasehold. Stamp duty is paid during the purchase, capital gains tax applies when a property is sold at a profit, and rental income tax is charged on earnings from tenants. Land rates are collected by county governments, while land rent is paid to the Ministry of Lands for leasehold plots. Being aware of these taxes helps investors plan better and avoid penalties.

    Zoning and Land Use Regulations

    Zoning regulations guide how land in specific areas may be used and are enforced by county governments under the Physical and Land Use Planning Act. Land may be zoned for residential, commercial, industrial, agricultural, or mixed-use purposes. Before buying property, investors must confirm the zoning classification to ensure their intended development is permitted. Ignoring zoning regulations can result in rejected approvals, stalled developments, or legal battles. Early verification ensures your project is aligned with county planning guidelines.

    Building and Construction Regulations

    Developing property in Kenya requires compliance with national and county building regulations to guarantee structural soundness and safety. Investors must submit building plans to the county government for approval. Large-scale developments may also need an Environmental Impact Assessment from NEMA. All construction projects must be registered with the National Construction Authority, which oversees standards and enforcement. Failure to comply can lead to penalties, stop orders, or demolition of unauthorized structures.

    Land Dispute Resolution in Kenya

    Land disputes are common and may stem from succession issues, double allocation, boundary disagreements, or fraudulent transactions. Kenya encourages resolution through mediation or arbitration, which is typically faster and less expensive than the court process. Where alternative methods fail, disputes are escalated to the Environment and Land Court. Seeking legal assistance early can help investors avoid lengthy disputes and protect their property rights.

    A thorough understanding of property laws is essential for anyone looking to invest in real estate in Kenya. By familiarising yourself with ownership categories, transaction procedures, tax requirements, zoning rules, and building regulations, you position yourself to make secure and informed investment decisions. Equipping yourself with the right legal knowledge ensures your investments remain safe, compliant, and profitable in the long term.

    The writer is a Legal Officer, SIC Investment Co-operative

  • Kenya To Appeal Regional Court Ruling That Suspended EU Trade Deal

    Kenya To Appeal Regional Court Ruling That Suspended EU Trade Deal

    NAIROBI, Nov 26 (Reuters) – Kenya will appeal against a regional court ruling that halted a trade deal with the European Union, Trade Minister Lee Kinyanjui said on Wednesday, adding the ruling imperils $1.56 billion worth of annual exports to the EU.

    The Tanzania-based East Africa Court of Justice suspended the implementation of the deal on Monday, Kinyanjui said, pending the outcome of a case brought by a non-governmental organisation challenging it.

    Kenya signed the deal, known as an Economic Partnership Agreement, with the EU in 2023 to guarantee its goods market access to the 27-nation bloc, and setting out a schedule for European goods to access the Kenyan market over time.

    A summary of the case against the agreement on the court’s website showed the NGO, the Centre for Law Economics and Policy, brought the case against Kenya on the grounds that the agreement with the EU violated some provisions of the treaty establishing the East African Community common market, of which Kenya is a member.

    Now the trade ministry has initiated a legal appeal to set aside the court’s injunction, Kinyanjui said. The minister did not say when the appeal will be heard by the court.

    “The Kenya-EU EPA is the lifeline of our booming exports and a source of livelihood to a large majority of Kenyans,” Kinyanjui said in a statement.

    “Kenya will continue to trade with the EU and steps are being taken to ensure continuity, predictability and protection of our existing commercial arrangements.”

    While Kenya exported $1.56 billion worth of goods to the EU last year, it imported $2.09 billion worth of goods from the bloc, the minister said.

    African nations have been looking to increase their exports to markets such as the EU and China, after the imposition of steeper tariffs by the U.S. government this year.

    The East African Community secretariat was not available immediately for a comment.

  • Co-op Bank, UNDP Launch Push to Modernise Rural Banking in South Sudan

    Co-op Bank, UNDP Launch Push to Modernise Rural Banking in South Sudan

    Co-operative Bank of South Sudan has entered into a new partnership with the United Nations Development Programme in what officials describe as one of the most ambitious efforts yet to overhaul rural finance in the young nation.

    The agreement, nested within the Rural Enterprise and Agricultural Development project, seeks to bring thousands of smallholder farmers, women-owned enterprises, and youth-led agribusinesses into the formal banking system—many for the first time.

    Caroline Mwongera, the country director for the UN’s International Fund for Agricultural Development, said the partnership signals a decisive shift in how rural finance will be delivered across South Sudan. She described the initiative as a move that “represents a transformational step in strengthening South Sudan’s rural financial systems,” adding that the programme will lean heavily on credit access, cooperative development, and financial literacy to drive long-term agricultural and community growth.

    IFAD has already injected 20 million dollars into the programme, with the government of South Sudan, UNDP, Co-operative Bank, and local communities contributing additional resources that push the total funding past 25 million dollars. The investment targets at least 162,000 people in seven counties, with women expected to account for half of the beneficiaries and youth making up nearly 70 per cent.

    In vast rural areas where formal banking remains almost non-existent, farmers often travel for hours to reach the nearest banking hall. Many rely on informal savings groups or handwritten loan agreements, while their produce is sold in unstructured markets that leave them vulnerable to middlemen. Officials say these gaps have kept farmers in cycles of low productivity and poor market access.

    Evans Kenyi Solomon, a technical adviser at the Ministry of Agriculture, said strengthening cooperatives will be key to breaking those cycles. He argued that empowering youth and women must be central to any lasting reform. “Youth and women empowerment is not a side agenda. It is the engine that drives peace, prosperity, and resilience in this country,” he said, noting that cooperatives help farmers negotiate better prices, bulk-purchase inputs, and build shared storage infrastructure after harvest.

    Co-operative Bank’s managing director, Elijah Wamalwa, said the partnership is the culmination of years of planning between development partners and the banking sector. He called the launch “an important step” in expanding financial access to places long ignored by formal lenders. Wamalwa said the bank intends to introduce rural credit products that respond to local realities and extend services to counties where farmers have traditionally relied on cash economies. “We want a future where a farmer in Nimule or Torit can access credit as easily as someone in Juba,” he said.

    Part of the rollout will include agency banking and a mobile-based platform designed for low-connectivity environments, allowing farmers to save, borrow, and receive payments without travelling long distances.

    UNDP deputy representative and senior economist Ligane Sene said the partnership also aligns with broader national goals of reducing dependence on oil revenue and diversifying the economy through agriculture. He said enabling farmers to work in organised groups would unlock economies of scale that could move South Sudan from chronic food imports to sustained food self-sufficiency. Sene added that the digital innovations embedded in the programme, including a national payment system, could help rural areas gradually transition toward a cashless economy.

    The partners say implementation will begin immediately, with community-based financial institutions expected to play a central role in the shift to modern banking. For many rural farmers, the initiative could mark the first real opportunity to access secure financial services—an opening they hope will lift incomes, stabilise markets, and build resilience in a country still recovering from years of conflict.

  • While Kenyans Looked Away, NCBA Shamelessly Tried to Dodge Its Tax Bill

    While Kenyans Looked Away, NCBA Shamelessly Tried to Dodge Its Tax Bill

    There is something deeply offensive about watching a bank owned by Kenya’s wealthiest families fight tooth and nail to avoid paying taxes that ordinary Kenyans cannot escape.

    While the rest of us dutifully watch stamp duty deductions chip away at every property transaction, every lease agreement, every financial instrument we touch, NCBA Group has spent months in court deploying expensive lawyers to argue why it should not pay Sh384.5 million in taxes that were illegally waived during a merger completed under the Uhuru Kenyatta administration.

    The audacity is breathtaking.

    This is not a struggling institution pleading poverty. This is a tier-one bank controlled by the Kenyatta family, holding 13.2 percent through Enke Investments, and the Ndegwa family, with 14.94 percent through First Chartered Securities.

    Between them, these two families control more than a quarter of one of Kenya’s largest financial institutions. Yet here they are, through their corporate vehicle, claiming that being asked to follow the same tax laws as everyone else would cause “irreversible business consequences” and “great hardship.”

    Let us be clear about what happened here.

    In June 2019, as NIC Bank and CBA merged to create NCBA, the Treasury issued Legal Notice No.112 exempting the transaction from stamp duty.

    This was not a small favor.

    We are talking about Sh384.5 million, a sum that could build several health centers, equip dozens of schools, or provide clean water to thousands of rural households.

    The waiver was granted during President Uhuru Kenyatta’s tenure, benefiting a bank in which his family holds substantial interest. The optics alone should have triggered alarm bells. The legality, as the courts have now confirmed, was always questionable.

    Senator Okiya Omtatah, then an activist, saw what many chose to ignore and challenged the exemption in court.

    In April 2025, more than two years after Uhuru Kenyatta left office, the High Court vindicated Omtatah’s petition, declaring the waiver unconstitutional.

    Former President Uhuru Kenyatta.
    Former President Uhuru Kenyatta.

    Justice ruled that the exemption violated both the Stamp Duty Act and Article 201 of the Constitution, which demands that the burden of taxation be shared equitably.

    In other words, even the elite must pay their fair share.

    One would think that a bank claiming to uphold corporate governance and regulatory compliance would accept this judgment with grace, pay what it owes, and move on.

    Instead, NCBA returned to court with a desperate application to freeze the order, arguing that immediate payment would destabilize its operations and harm depositors.

    The bank’s lawyers painted apocalyptic scenarios: liquidity disruptions, shareholder value erosion, customers suffering as operational funds, including deposits, would need to be tapped to meet the tax obligation.

    This is corporate melodrama at its finest. NCBA is not some fragile microfinance institution operating on razor-thin margins.

    It is a banking behemoth that reported healthy profits even as it fought this case

    The suggestion that paying Sh384.5 million, a sum it should have budgeted for in 2019 had the law been followed, would cripple its operations is an insult to public intelligence.

    Banks manage billions in assets daily.

    They stress-test for economic shocks, currency fluctuations, and regulatory changes.

    Yet we are supposed to believe that following a court order to pay legitimately owed taxes represents an existential threat?

    The bank’s argument that it acted “in good faith” when applying for the exemption is equally hollow.

    Good faith does not absolve illegality.

    If I evade taxes because I genuinely believed I was exempt, the Kenya Revenue Authority does not pat me on the back for my sincere confusion.

    It demands payment, with interest and penalties.

    Why should NCBA be treated differently?

    The law is supposed to be blind to wealth and connection, though this case suggests it squints generously when billionaire families are involved.

    NCBA’s lawyers also claimed that KRA lacks mechanisms to refund the money if the bank’s appeal succeeds, therefore the payment should be stayed.

    The judge rightly dismissed this as incorrect, noting that KRA, as a public entity, is perfectly capable of issuing refunds.

    But the argument reveals the entitled mindset at play here: the assumption that the burden of uncertainty should fall on the public purse rather than on the bank that benefited from an illegal waiver.

    Ordinary taxpayers who overpay wait months, sometimes years, for KRA refunds without the luxury of court injunctions. NCBA expects special treatment.

    What makes this fight particularly galling is the timing and the context.

    Kenya is in the midst of a fiscal crisis. The government has been forced to implement unpopular tax measures, from the controversial Finance Acts to increased levies on basic goods, all justified by the need to shore up revenue and service mounting debt.

    Citizens have taken to the streets in protest.

    Young people, tired of being squeezed at every turn, have become a force of resistance against what they see as an extractive state that serves the wealthy while bleeding the poor.

    Against this backdrop, watching a bank owned by dynasties that have accumulated wealth across generations fight to avoid paying taxes it never should have been exempted from is a masterclass in tone-deaf privilege.

    It reinforces every cynical belief Kenyans hold about the tax system: that it is designed to trap the many while offering escape routes to the few, that connections matter more than compliance, that the law applies selectively based on who you know and how much power you wield.

    The Treasury’s decision to grant the waiver in the first place raises serious questions that have not been adequately answered.

    What public interest justified exempting this particular merger from stamp duty when countless other corporate transactions proceed without such favors?

    The law allows for exemptions in specific circumstances, but they must be transparently justified and meet constitutional standards.

    The court found that this exemption failed that test.

    Yet nobody in the Treasury has faced consequences for issuing an illegal notice that cost the public hundreds of millions of shillings.

    No investigation has been launched into whether proper procedure was followed or whether influence was improperly exerted.

    The merger itself was presented as a strategic move to create a stronger banking entity capable of competing regionally.

    Fine.

    But why should Kenyan taxpayers subsidize the commercial ambitions of private shareholders? If the merger made business sense, it should have proceeded with or without the tax break.

    The fact that NCBA now claims the waiver was “a central element in the financial structuring of the merger” suggests the transaction’s viability was built on the foundation of an illegal benefit. That is not sound corporate planning. That is opportunism dressed in business-speak.

    The High Court’s refusal last week to freeze the judgment was legally sound and morally necessary.

    As the judge noted, granting a stay would effectively revive an unconstitutional act, contradicting Article 2(4) of the Constitution, which voids illegal actions immediately.

    Public interest cannot preserve laws already deemed invalid.

    To allow NCBA to continue enjoying the benefits of an illegal exemption while it appeals would make a mockery of the judicial process and send a chilling message: that the powerful can ignore unfavorable rulings simply by filing appeals and claiming hardship.

    NCBA’s case now moves to the Court of Appeal, where it will argue that the High Court misapplied principles of public interest and constitutional tax burden sharing.

    Perhaps the appellate judges will see things differently.

    But the bank should not hold its breath. The legal reasoning against it is solid, grounded in constitutional principles that courts have consistently upheld.

    More importantly, the court of public opinion has already rendered its verdict.

    Kenyans are tired of being told to tighten their belts while the elite loosen theirs.

    This case is about more than Sh384.5 million.

    It is about whether Kenya will enforce its laws equally or continue operating a two-tier system where the connected negotiate their obligations while the rest of us simply comply.

    It is about whether our institutions have the spine to hold the powerful accountable or will perpetually find reasons to accommodate their convenience.

    It is about whether we are serious about building a nation governed by law or content to maintain a façade of legality that crumbles whenever it inconveniences the right people.

    NCBA should pay what it owes, apologize for wasting judicial time and public patience, and commit to exemplary corporate citizenship going forward. Its shareholders, among the wealthiest Kenyans alive, will not miss the money.

    But the principle at stake, that everyone must contribute their fair share to the nation’s coffers, is one we cannot afford to compromise. Not now. Not ever.​​​​​​​​​​​​​​​​

    The Writer is an analyst at a leading financial think-tank in the region.

  • Construction Of Stalled Yaya Center Block Resumes After More Than 3 Decades and The Concrete Story Behind It

    Construction Of Stalled Yaya Center Block Resumes After More Than 3 Decades and The Concrete Story Behind It

    NAIROBI — For three decades, it stood as Nairobi’s most expensive monument to corporate vengeance. The Yaya West Wing building, a skeleton of concrete and steel adjacent to the bustling Yaya Centre shopping mall, has haunted Kilimani’s skyline since 1992, a silent witness to one of Kenya’s most dramatic business feuds.

    But now, after 32 years of abandonment, the cursed tower is finally coming back to life.

    JW Marriott has taken on what many construction experts privately called impossible: a complete renovation of the West Wing that promises to transform the doomed structure into a luxury hotel.

    The story behind the stalled tower reads like a John le Carré thriller mixed with a Shakespearean tragedy.

    It begins with Nicholas Kipyator Biwott, the man Kenyans knew as Total Man, one of the most powerful and feared politicians in Daniel arap Moi’s government.

    His nickname, the Bull of Auckland, came from an embarrassing diplomatic incident in New Zealand during a Commonwealth Heads of State Meeting in the 1990s. GG Kariuki teased him with it in Parliament after a housekeeper accused him of indecency.

    The incident became a diplomatic crisis that the foreign affairs ministry eventually doused, but not before it became fodder for endless jokes about how the Bull nearly mounted a hapless innkeeper.

    Total Man, or Karnet as Kalenjins called him (meaning Ironbar), was as intelligent as he was ruthless.

    In the early 1990s, he partnered with Israeli businessman Gad Zeevi to construct the Yaya Centre and its twin tower through their company, HZ Group.

    They founded the project with grand ambitions, securing financing through Trade Bank, a financial institution that the Kassam brothers had started but which Biwott and Zeevi owned 75 percent of.

    The arrangement was lucrative but convoluted.

    Trade Bank had advanced Biwott 900 million shillings that he never repaid.

    To cover their tracks, they borrowed money from the Deposit Protection Fund supposedly for Trade Bank’s own building but charged Yaya Towers Ltd’s assets instead.

    It was business done chini ya maji, under the water, away from scrutinizing eyes.

    But money has a way of exposing secrets.

    When the Kassam brothers started demanding repayments, they quickly learned that in 1990s Kenya, your freedom and rights were on loan from the deep state.

    Alnoor Kassam was given three options: be deported, walk away, or forget the money. He fled to Canada and never returned.

    With the Kassams out of the picture, you’d think the partnership would sail smoothly.

    Instead, it combusted spectacularly. Zeevi accused Biwott of playing cards under the table regarding their jointly owned companies.

    Fearing for his safety, Zeevi brought in reinforcements: his friend Vaizman Aharoni and David Kimche, an Israeli spy master.

    Both men were reportedly Mossad operatives, brought in as friends and associates but really serving as protection.

    Biwott’s paranoia, legendary even before this, went into overdrive.

    The man who never traveled in marked Mercedes or Pajeros, who never ate food served at high table events unless he could swap it with common servings, now had Israeli intelligence circling his empire.

    He would use five different cars to reach one destination, starting his journey in one vehicle and ending in a completely different one.

    Nobody ever knew which car carried the Total Man.

    The partnership was doomed. Around 1995, with construction of the West Wing building still incomplete and tensions at a breaking point, the Israeli partners decided to cut their losses. But they wouldn’t leave quietly.

    Fearing for their own lives as they too were being trailed, Aharoni instructed the Israeli contractor on site to abandon the property.

    But before leaving, the contractor received one final, devastating order: pour concrete into every elevator shaft, every drainage system, every functional waterway, and every stairwell.

    A random column of concrete was run haphazardly through the building’s core.

    It was architectural assassination.

    The West Wing became utterly useless, a building that couldn’t be completed without demolishing it entirely down to the basement.

    And because it shared property titles with the operational Yaya Centre, even demolition was nearly impossible.

    The Israelis left Kenya having served sweet revenge on the Bull of Auckland.

    For 32 years, the building remained frozen in time.

    Biwott died in July 2017, taking the full story with him.

    The Kassam who fled to Canada never returned. Smith Hempstone, the US Ambassador whom Biwott had expelled from Kenya and pursued with litigation until the diplomat went bankrupt and died in 2006, was long gone.

    The Israelis had vanished. But their concrete curse remained, looming over Kilimani like a ghost.

    Then in July 2023, everything changed. The Biwott family sold the entire Yaya complex, including the cursed West Wing, to a consortium led by the billionaire Kantaria family.

    The amount was never disclosed, but rumors put it in the billions of shillings.

    The Kantarias, already major players in Kenya’s hospitality industry with properties like the Radisson Blu Arboretum Hotel and Capital Centre Mall, saw opportunity where others saw only obstruction.

    They brought in JW Marriott, part of Marriott International’s luxury portfolio, to tackle what many considered an engineering nightmare.

    The renovation work is proving every bit as challenging as expected.

    According to sources close to the project, it’s pretty difficult work. There’s a new piping system, HVAC, everything. Lots of demolitions too. Renovations are hard, they say, especially when you’re essentially undoing deliberate sabotage from three decades ago.

    The project requires builders to work around or remove the concrete that was meant to make the building unusable forever.

    Every system must be rebuilt from scratch.

    The sabotage must be carefully extracted without compromising structural integrity or disturbing the adjacent shopping mall and hotel operations that continue humming along next door.

    It’s a delicate dance of destruction and reconstruction carried out in one of Nairobi’s most prime locations, where any misstep could cascade into massive complications.

    Yaya West Wing building that had remained incomplete for over three decades.
    Yaya West Wing building that had remained incomplete for over three decades.

    The timing tells you something about confidence.

    JW Marriott opened its flagship Nairobi property in Westlands in March 2024, a 35-story, 315-room hotel that became the tallest in Kenya.

    Their commitment to the Kenyan market appears unwavering.

    Transforming the Yaya West Wing represents both an engineering challenge and a statement of intent about where they see Nairobi’s hospitality sector heading.

    Meanwhile, the existing Yaya Hotel & Apartments in the completed tower has undergone its own transformation.

    After the 2023 acquisition, the property was fully revamped from top to bottom, with renovated lobbies, amenities, and some of Nairobi’s largest luxury rooms ranging from 1,076 to 3,000 square feet.

    The entire complex is being repositioned for a new era.

    As construction crews work to undo what was done in 1995, they’re not just renovating a building. They’re exorcising ghosts.

    The Yaya West Wing has loomed over Kilimani for more than three decades as a testament to what happens when powerful people clash, when paranoia meets ambition, when revenge is served in concrete rather than on plates.

    The building was meant to stand forever as a monument to spite.

    Instead, it’s being transformed into a luxury destination. Guests who eventually check in will sleep in rooms built on a foundation of espionage, sabotage, and one of the most bizarre property disputes in Kenyan history.

    They probably won’t know that the elevator carrying them to their floor once had its shaft filled with concrete by a contractor acting on orders from Israeli operatives fleeing a Kenyan power broker’s wrath.

    In Nairobi’s ever-evolving skyline, some buildings rise quickly and fade into obscurity. Others take 32 years and require exorcising corporate ghosts before they can fulfill their purpose.

    The Yaya West Wing belongs to the latter category.

    The concrete that was meant to bury this building forever is finally being chipped away, one hammer strike at a time.

    What was once Kenya’s most expensive monument to vengeance is becoming something else entirely: a hotel, a luxury space, a new beginning built on top of old grudges.

    The Bull of Auckland is long dead. The Israelis are long gone. The Kassams never came back. But their building, that cursed tower that shouldn’t have survived, is finally being given the life it was always supposed to have.

    The Yaya Centre complex sits on Argwings Kodhek Road in Kilimani, approximately 3.4 kilometers from Nairobi’s city center.

    JW Marriott hasn’t announced a completion timeline for the West Wing renovation, but construction is underway. After three decades of silence, the building is finally making noise again. This time, it’s the sound of jackhammers and hope.

    Artistic impression of Yaya Center.
    Artistic impression of Yaya Center.
  • Safaricom’s Licence Renewals Could Lock In Dominance and Open a New Era of Costly Telecom Bills

    Safaricom’s Licence Renewals Could Lock In Dominance and Open a New Era of Costly Telecom Bills

    Renewal of NFP-T1 and IGSS licences could increase data and call prices

    Safaricom is seeking to renew its two most powerful licences, a move that could cement its control over Kenya’s telecom infrastructure and push consumer costs higher at a time when households are already strained by rising prices.

    The applications, quietly tucked into a November 21 Gazette notice, relate to the NFP-T1 and IGSS licences which give Safaricom sweeping authority over national infrastructure and international communication routes.

    Industry analysts warn that renewal without new safeguards could deepen a monopoly that has thrived for years under weak regulation.

    The NFP-T1 licence allows Safaricom to operate the infrastructure backbone that every Kenyan relies on, from cell towers to data centres, while giving it access to critical spectrum bands.

    Previous studies show that markets dominated by a single operator often suffer data prices up to 30 percent higher than those with strong competition.

    The IGSS licence places Safaricom at the heart of international traffic, making it the gatekeeper of all inbound and outbound calls and data.

    Ongoing disputes over spectrum fees and penalties are expected to shape the renewal terms and could translate into higher tariffs as the company moves to protect its revenue.

    However, the biggest public concern is data privacy.

    In recent years, Safaricom has faced multiple accusations of leaking subscriber information to law enforcement without due process.

    Rights groups say the company’s relationship with state agencies exposes millions to surveillance risks while Parliament continues to probe alleged breaches.

    The CA is now inviting public comments for 30 days.

    For the first time in years, Kenyans have an opportunity to influence the conditions placed on Safaricom’s power.

    Whether the public intervenes could determine whether connectivity becomes more affordable and secure, or whether the next chapter belongs to an even stronger telecom giant.

  • Cytonn Loses 19 Appeals as Court Clears Liquidation of Sh11 Billion Real Estate Empire

    Cytonn Loses 19 Appeals as Court Clears Liquidation of Sh11 Billion Real Estate Empire

    Cytonn Investments has suffered a sweeping legal blow after the Court of Appeal dismissed all 19 challenges it had filed to stop the liquidation of its two high-profile investment vehicles, Cytonn High-Yield Solutions (CHYS) and Cytonn Project Notes (CPN).

    The unanimous verdict clears the path for the Official Receiver to proceed with recovering more than Sh11 billion owed to over 3,000 investors, bringing to a close four years of bruising court battles that have gripped Kenya’s financial and real estate sectors.

    The appeals, spread across six separate files, sought to overturn High Court rulings that preserved assets linked to Cytonn’s vast network of Special Purpose Vehicles (SPVs).

    The appellate judges backed the lower courts, affirming that the Official Receiver acted within the law in taking charge of the disputed properties and rejecting arguments that Cytonn-controlled SPVs were insulated from liquidation.

    The central question before the court was whether these SPVs, which developed Cytonn’s real estate projects using funds raised through CHYS and CPN, could stand apart as legally independent entities. The court concluded they could not.

    Though the SPVs were registered as separate legal persons, the judges found that in practice they were “inextricably intertwined” with Cytonn Investments and its founder Edwin Dande, who simultaneously served as CHYS CEO and principal partner across nearly all the SPVs.

    By preserving and vesting the assets under the Official Receiver, the Court of Appeal said it was upholding the liquidator’s statutory duty “to gather, manage and distribute the insolvent estate in a manner that ensures equitable treatment of all creditors,” echoing language used in the High Court’s 2023 and 2024 orders meant to prevent asset dissipation.

    Attention now shifts to asset realisation, an exercise that will determine how much investors recover from one of Kenya’s most consequential investment collapses.

    Among the preserved assets are some of Cytonn’s signature real estate developments:

    • The Alma (Sh1.43 billion)

    • Kilimani project (Sh1.73 billion)

    • Amara Ridge (Sh502.8 million)

    • Superior Homes (Sh383.9 million)

    • Riverrun projects (over Sh800 million combined)

    • Ridge project (Sh331 million)

    • Newtown Mystic Plains (Sh60.5 million)

    • Athi River project (Sh236 million)

    • CySuites (Sh187 million)

    • Taraji Heights (Sh53.8 million)

    • Applewood Miotoni

    The full list spans several prime Nairobi addresses and collectively represents billions of shillings in potential recoveries.

    The High Court had earlier defended its decision to place CHYS and CPN under liquidation, noting that its duty was to protect the thousands of small investors who poured life savings into Cytonn’s high-yield products.

    “The court must be sensitive to the plight of over 3,000 members of the public who sank over Sh11 billion into these projects and therefore lean towards a lesser evil, which is to preserve the assets for the time being,” the High Court said in a ruling that has now been fully endorsed by the appellate bench.

    Court filings paint a picture of a complex financial ecosystem linking Cytonn Investments Management PLC, its investment pools CHYS and CPN, and at least 17 SPVs that acquired and developed real estate. The funds raised from investors were channelled into these SPVs, which were expected to develop and sell properties to generate returns.

    But the Court of Appeal found the SPVs’ operations so structurally blurred that, in one of its most damning assessments, it upheld the High Court’s description of the arrangements as “a scheme akin to fraud.” The judges stressed that the term reflected the nature of the financial set-up rather than any prejudgment of criminal culpability.

    Claims by some investors who argued that they were bona fide purchasers of certain units were also rejected, at least at this stage, with the court directing that such claims must first be addressed through the liquidator’s verification processes. Creditors pushing for an alternative Debt Settlement Proposal fared no better, with the court dismissing the plan as speculative and an improper attempt to usurp the Official Receiver’s mandate.

    The appeals court also agreed with the High Court’s reliance on the doctrine of tracing to preserve assets, noting that the principle was applied “appropriately” to link investor funds to current properties, not to seize or dispose of them prematurely.

    Cytonn’s troubles first spilled into the open in 2021 when Mr Dande and Cytonn Investments Management PLC admitted they could not meet investor obligations and sought administration for CHYS and CPN. Administrator reports later revealed stark financial shortcomings, including the absence of credible funding models and no realistic path to rescue, ultimately leading the High Court to terminate administration in favour of full liquidation.

    The Court of Appeal’s decision comes just months after another setback for Cytonn, a High Court ruling in September that upheld the Capital Markets Authority’s directive limiting Cytonn Asset Managers and the Cytonn High Yield Fund to investing no more than 10 percent of their portfolios in Cytonn-related projects.

    Founded in 2014, Cytonn rose rapidly by selling high-yield real estate opportunities to ordinary Kenyans. Its collapse, exposing thousands to losses, stands as one of the most high-profile investment failures in recent memory.

    With all legal roadblocks now cleared, the Official Receiver is expected to move quickly to begin asset sales and distribute proceeds, marking the final phase of a saga that reshaped investor expectations, regulatory oversight and the boundaries of financial engineering in Kenya’s real estate market.

  • Trump Cancels Sh7.4 Billion Deal With Kenya Signed By Biden and Ruto

    Trump Cancels Sh7.4 Billion Deal With Kenya Signed By Biden and Ruto

    The Biden-era Sh7.4 billion agreement to support Nairobi’s Bus Rapid Transit (BRT) system has been scrapped by US President Donald Trump, plunging one of Kenya’s flagship urban mobility projects into fresh uncertainty and widening the financial hole in the city’s stalled public transport overhaul.

    Treasury disclosures show that the Millennium Challenge Corporation (MCC) Threshold Program, which was designed to run until mid-2027 and unlock major reforms and investments in Nairobi’s transport and land-use planning, is now being formally terminated.

    Kenya has already received official notice of cancellation from Washington.

    The programme was signed in New York on September 19, 2023 during President William Ruto’s visit to the United Nations General Assembly, and came into force in May 2024 following his state visit to the White House.

    It was one of the cornerstone agreements of Ruto’s engagement with then US President Joe Biden, promising Sh5.8 billion in American support and a Kenyan contribution of Sh1.56 billion.

    The MCC threshold package was meant to strengthen Nairobi’s long-term urban planning, expand safe pedestrian and cycling infrastructure, integrate gender-inclusive public transport, and support the acquisition of climate-friendly buses for the emerging BRT network.

    Treasury officials noted in last week’s Sector Budget Proposal Report that the programme is now earmarked for termination.

    Kenya had hailed the deal as a breakthrough for modernising public transit in a city long overwhelmed by congestion and ageing matatu fleets.

    At the signing ceremony, Treasury Cabinet Secretary Njuguna Ndung’u said the investment would strengthen transport and land-sector institutions and deliver long-lasting benefits to Nairobi residents. Those ambitions are now in doubt.

    President Trump returned to the White House on January 20, 2025 after defeating Kamala Harris, and immediately launched a sweeping rollback of Biden’s foreign policy and development portfolio.

    His administration has already begun dismantling USAID and reviewing nearly all foreign aid agreements.

    Trump announced plans to eliminate more than 90 percent of USAID contracts and cut about $60 billion in global assistance.

    Kenya has been among the hardest hit, with the value of cancelled American contracts now exceeding Sh108 billion.

    The BRT programme is one of the biggest casualties. Funding shortages have already slowed payments to contractors and delayed key components of Nairobi’s five-line BRT network.

    The cancelled MCC contribution was expected to partially fund Line 2, the Simba corridor serving Rongai, Lang’ata, the CBD, Ruiru, Thika, and Kenol. The line was to feature 10 intermediate stations, park-and-ride hubs, and dedicated lanes along Thika Road.

    Other segments of the BRT network remain dependent on international partners.

    Line 3 is backed by €320 million and will run from Tala and Njiru through Dandora and the CBD to Ngong, with 120 planned electric buses. Line 4 is supported by the African Development Bank and connects Donholm and the CBD to Karen and Kikuyu.

    Line 5 will rely on financing from the Korean Exim Bank for its Sh7.3 billion Outer Ring Road corridor. Line 1 will operate from Limuru to Imara Daima through the Nairobi Expressway.

    Collectively, the BRT lines were expected to deliver dedicated lanes, modern stations, footbridges, CCTV enforcement systems, park-and-ride facilities, and EV-charging depots.

    With the US withdrawal, Kenya faces a widening financing gap that threatens project timelines and the realisation of a clean, integrated, rapid-transit system for the capital.

    The Transport ministry recently announced the completion of the Business Management Centre at the Kasarani Depot, an essential operations hub for the Line 2 corridor.

    Without the MCC funds, officials now fear the broader urban mobility plan could fall further behind schedule at a time when congestion and air-quality challenges in Nairobi continue to worsen.

    For Kenya, the collapse of the MCC deal marks not only a setback for sustainable transport but also a broader signal of shifting geopolitical winds as the Trump administration recalibrates America’s development footprint.

    The government will now be forced to seek alternative financing to rescue the BRT programme or risk watching one of Nairobi’s most ambitious infrastructure missions stall indefinitely.

  • Scotsman Sought in Kenya Over Sh119 Million Safaricom Fraud

    Scotsman Sought in Kenya Over Sh119 Million Safaricom Fraud

    A Scottish businessman convicted in a Sh3.39 billion VAT fraud in the United Kingdom is wanted in Kenya for fleeing the country with an unpaid debt of Sh119 million owed to telecommunications giant Safaricom.

    Leslie Thompson, 63, from Bathgate, West Lothian, and his business partner Steven James Moran abandoned their Nairobi offices in 2016 and transferred their company shares to an offshore entity in the Seychelles in what court documents describe as “an engineered ploy” to escape their financial obligations.

    Thompson’s firm, Iphone Global Systems Limited, had entered into a business arrangement with Safaricom in 2006 to interconnect their telecommunications networks through voice over internet protocol services.

    However, a decade into the partnership, the company began defaulting on payments owed to Safaricom.

    Court documents filed by Safaricom in Nairobi show that the telecommunications company was unaware Thompson and Moran had fled Kenya until it attempted to serve them with legal papers at their offices at Ad Life Plaza in Nairobi. The building was deserted.

    Safaricom sought court permission to notify the two directors of the lawsuit through newspaper advertisements after all attempts to locate them in Kenya failed. The court granted the request. A Nairobi judge has since ordered Thompson and Moran to return to Kenya to answer for the debt, warning they would be held personally liable if they failed to appear.

    Thompson’s legal troubles extend far beyond Kenya. In March 2024, he was sentenced to six years in prison in the United Kingdom and banned from serving as a company director for 12 years following his conviction in a complex tax fraud scheme.

    The UK’s His Majesty’s Revenue and Customs uncovered that Thompson was a key player in a sophisticated conspiracy centred on Winnington Networks Limited, a company based in Crewe, Cheshire. Between 2011 and 2014, the network of fraudsters deliberately understated their VAT obligations by more than Sh3.39 billion through fake trading chains involving metals, electrical goods and telecommunications equipment.

    Thompson recruited legitimate business owners to participate in the fraudulent scheme, using their companies to create false VAT returns. The conspiracy involved creating fictitious deal chains and even establishing two fake offshore banking platforms purportedly based in the Seychelles and Canada to produce convincing financial records.

    Investigators secured crucial evidence when they recorded Thompson and other conspirators at hotel meetings in Manchester and Birmingham in late 2013, where the men openly discussed the fraud and how they could “invent the numbers” to falsely offset their VAT claims.

    The decade-long investigation by HMRC, dubbed Operation Barbados, resulted in the conviction of 20 people across four separate criminal trials. The convicted fraudsters received combined prison sentences totalling more than 70 years.

    Thompson’s wife, Beverley Thompson, 60, was handed a two-year suspended sentence in October 2024 for money laundering after investigators discovered she allowed up to Sh42 million to flow through her bank accounts. The couple enjoyed a lavish lifestyle that included two holiday homes in Florida funded by the proceeds of crime.

    Their son, Andrew Collins, 41, who had changed his surname from Thompson, received a 22-month suspended sentence after pleading guilty to conspiracy to cheat the public revenue. He was also banned from acting as a company director for eight years.

    Richard Las, director of HMRC’s Fraud Investigation Service, described the case as an “incredibly complex fraud” that required years of dedicated investigation to unravel.

    “The scale of the sentences and the significant director disqualifications show how seriously the courts have treated this sustained and sophisticated attack on the UK tax system,” Las said.

    Safaricom has indicated it intends to pursue the debt through legal channels, including seeking to be joined in any bankruptcy proceedings Thompson and Moran may have filed in the United Kingdom.

    The telecommunications company has not commented publicly on the status of the case or whether it has recovered any portion of the outstanding debt. Efforts to reach Thompson and Moran for comment were unsuccessful as their whereabouts remain unknown.​​​​​​​​​​​​​​​​

  • Egyptian Lender CIB Bank Put On FRC Probe Over Alleged Money Laundering

    Egyptian Lender CIB Bank Put On FRC Probe Over Alleged Money Laundering

    Commercial International Bank Kenya is under investigation by the Financial Reporting Centre over a suspicious cross-border transfer of Sh69.5 million from Laos, raising fresh concerns about compliance gaps in Kenya’s banking sector.

    The Egyptian-owned lender is facing scrutiny after allegedly facilitating the wire transfer of $523,599.85 from Phongsavanh Bank Ltd, a mid-tier Laotian bank, through the account of a Nairobi-based law firm. According to a confidential report dated September 22, 2025, the transaction has been flagged as part of a potentially sophisticated money-laundering scheme.

    The Financial Reporting Centre has forwarded the matter to the Kenya Revenue Authority for further investigation, citing possible breaches of the Proceeds of Crime and Anti-Money Laundering Act. Under POCAMLA, banks are required to subject cross-border transfers to stringent checks, particularly when they involve unusual sources, opaque beneficiaries, or uncommon transaction volumes.

    The funds originated from Laos, a country better known for its agricultural economy than formal financial ties with Kenya. Laos’ banking sector has been repeatedly flagged by the Asia/Pacific Group on Money Laundering for weak financial controls and delayed anti-money laundering reforms. The country underwent an assessment in September 2022, with the evaluation report adopted in July 2023 noting significant gaps in its legal and institutional framework for combating financial crimes.

    Investigators were immediately alarmed by the transaction, given that the Laotian entity does not appear in Kenyan business records and there is no clear rationale for such a substantial transfer through a Nairobi law firm. The account holder reportedly told investigators the money was intended for Kenya’s Affordable Housing Programme, President William Ruto’s flagship initiative to deliver 250,000 housing units annually.

    However, this explanation has raised eyebrows among financial crime experts. The Affordable Housing Programme is predominantly funded by Kenyan taxpayers through a contentious 1.5 per cent housing levy, matched by employers. By June 2025, the state had already collected Sh73.2 billion from this levy. The appearance of an obscure Laotian firm with no footprint in Kenyan real estate injecting millions into an already well-funded programme has fuelled suspicion that the housing scheme was merely a convenient cover for illicit funds.

    CIB Kenya’s recent history adds complexity to the probe. Formerly Mayfair CIB Bank, the institution was fully acquired by Egypt’s Commercial International Bank in January 2023, marking a strategic expansion into East Africa. The acquisition, approved by regulators in Cairo and Nairobi, was expected to stabilize the mid-sized lender, which had struggled following the Covid-19 pandemic. Since the takeover, the bank has modernized branches, rolled out digital products, and positioned itself as a champion of small and medium enterprises.

    At the helm is CEO and Managing Director Abhinav Nehra, a veteran banker with over 35 years of experience across Africa, Asia, and the Middle East. Nehra has promoted CIB’s five-star banking approach, emphasizing SME lending, cashflow-driven financing, and stronger trade links between Kenya and Egypt.

    However, this unfolding scandal threatens to undermine that carefully cultivated image. When contacted for comment on the allegations, Mr Nehra did not respond to detailed questions about the bank’s compliance procedures. Specifically, CIB Kenya was asked whether it adequately verified the beneficial owner of the Laotian sender, whether the Nairobi law firm’s role was thoroughly scrutinized, and whether the bank froze the funds or initiated an internal audit after the FRC alert.

    The silence has only deepened concerns about transparency at the institution. In an era when financial institutions are expected to respond swiftly to public concerns and maintain open lines of communication with regulators, the lack of a statement from CIB Kenya raises questions about the bank’s handling of the matter.

    Kenya’s financial system has long been vulnerable to money-laundering networks, from gold smuggling cartels to cryptocurrency fraud. A recent FRC report revealed that Kenyan banks handled suspicious money amounting to Sh6.38 trillion between 2021 and 2024, with transactions often conducted through shell companies that concealed the identities of those involved.

    Foreign-owned banks, with their international reach and cross-border capabilities, pose even greater risks when compliance systems fail. While CIB Kenya’s parent company in Egypt boasts a strong compliance track record amid that country’s volatile economic climate, this incident raises doubts about whether the same standards are being upheld at its Kenyan subsidiary.

    For small and medium enterprises, which form the backbone of Kenya’s economy and are the very clientele CIB claims to champion, confidence in financial institutions is paramount. A single compliance lapse can erode trust built over years and undermine the bank’s stated mission of supporting economic growth.

    The Central Bank of Kenya, which supervises and enforces compliance with POCAMLA, has yet to issue a public statement on the matter. Under the law, banks that fail to adequately screen cross-border transactions or report suspicious activity face significant penalties, including fines of up to Sh5 million or imprisonment for responsible officers.

    As investigations continue, the case serves as a stark reminder of the importance of robust anti-money laundering controls in Kenya’s banking sector. With international watchdogs increasingly scrutinizing financial flows from jurisdictions with weak regulatory frameworks, banks operating in Kenya must demonstrate that they have the capacity to effectively vet and police cross-border transactions.

    The outcome of the FRC probe will be closely watched by regulators, industry players, and customers alike, as it will set a precedent for how seriously Kenya takes its obligations to prevent money laundering and maintain the integrity of its financial system.