Kenya Insights

Tag: Nairobi Securities Exchange (NSE)

  • Cabinet Approves Sale of Kenya Pipeline Company for NSE Listing

    Cabinet Approves Sale of Kenya Pipeline Company for NSE Listing

    NAIROBI, July 29 – President William Ruto’s Cabinet has given the green light for the partial privatisation of Kenya Pipeline Company (KPC), marking a strategic shift toward private sector-led growth in the country’s energy infrastructure.

    The decision, reached during Tuesday’s Cabinet meeting at State House, will see the government divest part of its shareholding in the profitable energy parastatal through a listing on the Nairobi Securities Exchange (NSE).

    This move aims to democratise ownership by allowing ordinary Kenyans to acquire shares in one of the country’s most strategic assets.

    “The Cabinet gave the green light for the reinstatement of Kenya Pipeline Company into the privatisation programme, paving the way for partial divestiture of government shares,” State House announced in a dispatch following the meeting.

    KPC, which plays a central role in Kenya’s energy supply chain, has maintained consistent profitability over the years.

    However, Cabinet noted that despite this strong financial performance, the company has not reached its optimum potential due to bureaucratic constraints and public sector inefficiencies that have limited its market value.

    The privatization strategy is expected to inject private capital and professional expertise into the firm, modernizing its operations and positioning it as a regional logistics and energy powerhouse.

    Cabinet emphasized that this approach follows successful precedents where state-controlled entities transformed into high-performing companies after privatisation.

    “Safaricom, Kenya Commercial Bank, and KenGen are prime examples of formerly state-controlled entities that became high performing companies following privatisation, driving shareholder value, expanding regionally, and creating thousands of jobs,” the Cabinet statement noted.

    The move represents a broader policy shift aimed at reducing the government’s direct involvement in commercial enterprises while enabling the private sector to drive growth, efficiency, and innovation.

    This aligns with the administration’s strategy of focusing public resources on delivering essential services rather than commercial ventures.

    The privatisation of KPC is anticipated to boost investor confidence and support the development of Kenya’s capital markets.

    The inclusion of the company in the privatisation pipeline will proceed under existing laws and regulatory frameworks that guide the sale of public assets.

    The decision comes as part of a wider economic restructuring agenda by the Ruto administration, which seeks to embrace private sector-led growth while maintaining operational discipline and accountability in public enterprises.

    The partial sale is expected to unlock significant value for both the government and future shareholders while ensuring the company remains strategically important to Kenya’s energy security.

    The timeline for the privatization process and the percentage of shares to be offered to the public will be determined through the established regulatory frameworks governing such transactions.

  • Inside Nairobi Securities Exchange Boardroom Wars and Plot to Oust CEO

    Inside Nairobi Securities Exchange Boardroom Wars and Plot to Oust CEO

    Stockbrokers mobilize to remove Frank Mwiti after just one year in office, citing leadership failures and market disconnect

    May 31, 2025

    The Nairobi Securities Exchange (NSE) is embroiled in a bitter boardroom battle as stockbrokers launch an unprecedented campaign to oust Chief Executive Officer Frank Mwiti, barely a year after his appointment to lead Kenya’s premier capital market.

    In a dramatic escalation of tensions at the bourse, the Kenya Association of Stockbrokers and Investment Banks (Kasib) has formally called for an extraordinary general meeting to remove Mwiti from office, accusing him of authoritarian leadership and making critical decisions that threaten the very foundation of Kenya’s stock market ecosystem.

    The Catalyst for Conflict

    The rebellion against Mwiti’s leadership centers on his alleged push for direct share trading that would bypass traditional stockbrokers – a move that threatens to undermine the business model that has sustained the market for decades. Stockbrokers, who collectively own 20 percent of the NSE, view this as an existential threat to their livelihood and a fundamental betrayal of the exchange’s core principles.

    “We hereby express a vote of no confidence in the chief executive officer of the NSE,” Kasib declared in a scathing letter to NSE Chairman Kiprono Kittony. The lobby group, led by Chairman Donald Wangunyu, accused Mwiti of displaying “a disconnect from market realities and stakeholder relations.”

    The controversy has exposed deep fractures within the NSE’s governance structure, with brokers claiming they have been systematically excluded from strategic decision-making processes that directly impact their businesses. At stake are brokerage commissions worth Sh1.9 billion annually – revenue that could be redirected to the exchange if direct trading becomes the norm.

    A Pattern of Alleged Violations

    The stockbrokers’ grievances extend beyond the direct trading issue. They have compiled a damning list of alleged procedural violations and leadership failures that paint a picture of an institution in crisis:

    Strategic Secrecy: Mwiti stands accused of deliberately withholding the NSE’s strategic plan from stakeholders, keeping it secret to avoid scrutiny. “As Kasib members, we have been prevented from interrogating the strategy,” the brokers complained, expressing their intention to “disassociate themselves from a strategic plan that they are not privy to.”

    Governance Breaches: The recent Annual General Meeting held on May 21 has become a flashpoint of controversy, with brokers alleging that the CEO failed to comply with the mandatory 21-day notice requirement – a fundamental breach of corporate governance standards.

    Board Relations: Perhaps most damaging are accusations that Mwiti has been making material decisions without board knowledge, suggesting a breakdown in the relationship between the CEO and the NSE’s governing body.

    The Power Struggle

    This boardroom war represents the first major public confrontation between NSE leadership and traders since the exchange’s transformative 2014 initial public offering. That landmark event saw the bourse transition from a mutual company wholly owned by stockbrokers to a publicly traded entity, with foreign investors and the Kenyan government acquiring significant stakes.

    The 2014 IPO fundamentally altered the power dynamics at the NSE. The Nairobi Securities Exchange sold up to a 38 percent stake in an initial public offering to raise funds for new products and enhance transparency. This demutualization process diluted stockbrokers’ control while introducing new stakeholders with different priorities and expectations.

    Today, the ownership structure reflects this transformation. Foreign funds and overseas pension schemes now hold the largest stake at 23.82 percent combined, while the Treasury maintains a 3.35 percent stake. Individual stockbrokers have been relegated to holdings between 1.34 percent and 2.69 percent each – a dramatic fall from their previous position of complete ownership.

    The Man in the Eye of the Storm

    Frank Mwiti’s journey to the NSE CEO position began with considerable promise. Following the completion of Odundo’s tenure, the board announced the appointment of Frank Mwiti as the new Chief Executive of the NSE effective May 2, 2024, subject to appropriate regulatory approvals by the Capital Markets Authority.

    Mwiti brought impressive credentials to the role, having served as a Partner at Ernst & Young and as the Eastern Africa Markets Leader. His appointment was seen as a fresh start for the exchange after Geoffrey Odundo’s nine-year tenure. The board praised him as “a dynamic and accomplished business leader,” and his extensive experience across PwC, EY-Parthenon, Deutsche Bank, and Afrika Kapital suggested he was well-equipped to navigate the complex challenges facing Kenya’s capital markets.

    However, what was supposed to be a smooth transition has devolved into one of the most acrimonious leadership disputes in the NSE’s recent history.

    The Constitutional Crisis

    The mechanics of removing Mwiti reveal the complex constitutional arrangements governing the NSE. Under the exchange’s articles of association, the CEO can only be dismissed if all eight directors call for his resignation in writing. This creates a high bar for removal, requiring unanimous agreement among the board members.

    The current NSE board comprises eight directors, including six non-executives: Donald Wangunyu (who doubles as Kasib Chairman), Risper Alaro, Stephen Chege, Caroline Kariuki, John Niepold, and Isis Nyong’o. The recent resignation of Paul Mwai, who represented trading participants, and the exit of independent director Michael Turner have created two vacant positions that have become additional sources of conflict.

    Board Composition Battle

    Beyond Mwiti’s removal, Kasib is waging a parallel campaign to secure strategic board positions. They are pushing for Nancy Noreh, a manager at Sterling Capital, to fill the seat vacated by Paul Mwai, and Tom Mulwa, managing director of Liaison Group, to occupy the independent director position left by Michael Turner’s departure.

    “Trading participants insist on their right to maintain at least two representatives in the board,” Kasib declared, framing their demands in terms of fundamental representation rights rather than mere preference.

    This battle for board control reflects deeper concerns about the direction of the NSE and who gets to shape its future. The stockbrokers view these positions as essential checkpoints against policies that could further marginalize their role in Kenya’s capital markets.

    Market Implications

    The timing of this leadership crisis could hardly be worse for Kenya’s capital markets, which face numerous challenges including limited new listings, declining trading volumes, and increased competition from alternative investment platforms. The NSE currently lists 64 companies with a total market capitalization of approximately Ksh2.16 trillion, with Safaricom alone controlling 44 percent of the market.

    The public nature of this dispute threatens to undermine investor confidence at a time when the exchange can ill afford reputational damage. International investors, who have become significant stakeholders since the 2014 IPO, will be watching closely to see how the governance crisis unfolds.

    The Regulatory Dimension

    The allegations of procedural violations, particularly regarding the recent AGM, have potential regulatory implications. The Capital Markets Authority (CMA), which oversees the NSE’s operations, may need to intervene if governance standards have indeed been compromised.

    The accusation that Mwiti’s direct trading push violates the Capital Markets Act 2023 and NSE direct market access guidelines adds another layer of complexity, potentially drawing regulatory scrutiny to the CEO’s strategic initiatives.

    The Response

    Mwiti has declined to comment directly on the ouster attempt, referring inquiries to Chairman Kittony since the formal complaint was addressed to the board rather than him personally. This strategic silence may reflect legal advice or an attempt to avoid inflaming tensions further.

    Chairman Kittony has acknowledged receiving Kasib’s letter and indicated that consultations are underway. “I have received the letter from Kasib. As you know they are our key stakeholders. We will consult and get back to you,” he stated, suggesting the board is taking the concerns seriously.

    The Deadline Approaches

    Kasib has given the NSE board until June 19, 2025, to respond to their demands – a deadline that adds urgency to what could become a prolonged governance crisis. The three-week timeline reflects the brokers’ impatience with the current situation and their determination to force a resolution.

    The approaching deadline will likely intensify behind-the-scenes negotiations as both sides seek to build support for their positions. The outcome will depend largely on the board’s appetite for change and their assessment of Mwiti’s leadership.

    Context

    The current crisis echoes patterns seen in other demutualized exchanges worldwide, where former member-owners struggle to adapt to new governance structures that dilute their influence. The NSE’s transition from mutual ownership to public company status was always going to create tensions between different stakeholder groups with competing interests.

    The 2014 IPO was celebrated as a modernization milestone that would bring greater transparency and capital to the exchange. However, the current dispute suggests that the governance arrangements established during demutualization may not have adequately balanced the interests of all stakeholders.

    What’s at Stake

    This boardroom battle will determine not just Mwiti’s fate but the future direction of Kenya’s capital markets. If the stockbrokers succeed in their ouster attempt, it would send a powerful message about the continued influence of traditional market participants despite their reduced ownership stakes.

    Conversely, if Mwiti survives the challenge, it could signal a definitive shift toward a more exchange-centric model that reduces reliance on traditional brokerage intermediation.

    The resolution of this crisis will have far-reaching implications for:

    • Market Structure: Whether Kenya’s capital markets evolve toward direct trading or maintain traditional brokerage-mediated transactions
    • Governance Standards: How demutualized exchanges balance competing stakeholder interests
    • Investor Confidence: Whether the NSE can maintain its reputation as a well-governed institution
    • Regulatory Framework: Potential changes to oversight mechanisms for exchange governance

    The Broader Picture

    Beyond the immediate personalities and procedures involved, this dispute reflects fundamental questions about the evolution of capital markets in the digital age. Around the world, exchanges are grappling with disintermediation pressures as technology enables more direct connections between investors and markets.

    The NSE’s experience may serve as a case study for other African exchanges navigating similar transitions. The outcome could influence approaches to demutualization and stakeholder management across the continent’s emerging capital markets.

    Conclusion

    As Kenya’s financial sector watches this drama unfold, the NSE boardroom war represents more than a simple leadership dispute. It embodies the tension between tradition and transformation, between established interests and emerging opportunities, between collective ownership and corporate governance.

    The next few weeks will determine whether Frank Mwiti survives to implement his vision for the NSE or becomes another casualty of the complex politics that govern Kenya’s capital markets. Whatever the outcome, this crisis has already revealed deep structural challenges that will need to be addressed to ensure the long-term health of the Nairobi Securities Exchange.

    The stakes could not be higher for an institution that plays a central role in Kenya’s economic development and serves as a gateway for international investment into East Africa’s largest economy. As the June 19 deadline approaches, all eyes will be on the NSE boardroom, where the future of Kenya’s capital markets hangs in the balance.

     

  • Dyer And Blair Investment Bank Under Probe In Sh19M Fraud

    Dyer And Blair Investment Bank Under Probe In Sh19M Fraud

    Dyer and Blair Investment Bank has come under the spotlight following accusations of wash-sale trading scheme.

    This a practice where the investor’s shares are sold without their permission at a lower price after which they’re are bought back at a higher price.

    Kenya Insights has learnt that an investor has petitioned the parliament to intervene accusing the stock broker of selling his shares without his permission in fraud that cost him Sh19M.

    By 2015, the investor Paul Matibo had invested a total of Sh27M in shares and cash at Dyer and Blair from ABC Capital and Kingdom Securities.

    “That him in-spite of him not instructing the bank to make any transactions on his behalf, Ngei was shocked to learn between May and August 2015, the broker had committed his shares in a wash-sale scheme where profitable shares had been sold for low value and repurchased at a higher value,” the petition reads.

    Same company

    The petition adds that without Ngei’s authority, Dyer and Blair sold 22,700 shares in Kenol/Kobil Ltd. at Sh8.80 each on May 28,2015 and repurchased 8,300 shares in the same company at Sh8.80 per share on May 29,2015 then further sold 80,500 shares in the company on the same date at Sh8.60 per share.

    On August 3,2015, Dyer and Blair again without express instructions or authority from Ngei sold 200,000 shares in Equity Bank for Sh37.75 each.

    The broker then on August 6,2015, repurchased 100,000 shares in Equity Bank for Sh40 each and purchased a further 70,300 shares in the said bank for Sh42 each on August 13,2015.

    Petition

    “By engaging in the foregoing reckless, fraudulent, irregular and unregulated trading activities, Dyer and Blair Investment Bank exposed Ngei a colossal loss of Sh19.4M,” said the petition to parliament after Capital Markets Authority (CMA) reportedly failed to take action.

    Ngei says that he enquired from the broker about the unexpected depreciation of his shares at the end of 2015, the bank falsely associated it with devaluation of shares.

    However, contrary to the claims by the bank, Ngei established from the CDSC that Dyer and Blair had fraudulently traded in his shares without his permission.

    Ngei lodged a complaint with the CMA the regulator of capital markets but in spite of the subsequent follow ups made on November 30 2020 and January 2022 to have his complaint addressed, the regulator turned a blind eye in a measure to protect the bank and the matter is yet to be addressed.

    Therefore Ngei is asking the National Assembly through the Departmental Committee on Finance and National Planning to take the matter with a view of to recovering his losses from the broker and also punish CMA for in action.

    The petition was made through Kitui Rural MP David Mboni Mwalika.

    The bank has been faced with similar allegations before in what now appears to be common. Previously, a customer, a Margaret Mukuhi Njuguna alleged fraudulent transfer of Kshs 10,933,510.55 from her account without her knowledge.

    Another instance, the bank’s executive was alleged to have approved a Sh26.2M payment to an impostor who supposedly used forged documents.

    In 2010, a Mr Joseph Kimani, highlighted the fraudulent sale of his shares in KCB and EABL worth a total of over KShs 30,000.

    The Star newspaper reported on a court ruling of a case involving James Mugo, a Dyer & Blair Investment Bank agent in Murang’a who admitted to swindling off Kshs 200,000 from a client, Ms Hellen Wambui.

    In 2016, Dyer and Blair Investment Bank was accused of colluding with CFC Stanbic bank to defraud a client of millions in returns on his investment.

    The High Court termed the incidents that led up to the crime as a complicated wave of deceit perpetuated by the two companies to trade on their client’s money without accounting for interest earned. John Kung’u Kiarie, a former director of Kenya Commercial Bank had invested KSh 100 million with Dyer and Blair who would invest his money in the bond markets among other places. Confident that his money was put to good use, Kiarie went on with his life until he found himself in problems with his then employer in which a criminal case was filed against him.

    In the process of undergoing investigation, the Central Bank of Kenya Fraud Investigation Unit looked into his accounts and discovered that his monies were operational. As if in synchronization, Blair and Dyer offered to freeze Kiarie’s accounts without the fraud investigation unit asking them to back in 2003.

    The CBK unit found that Blair and Dyer as well as CFC Stanbic continued holding on to the money illegally and even used it in trading their businesses without their client knowing. The criminal case against Kiarie ran from 2003 to 2007 when he filed the court case against Mbaru’s firm and the bank. He claimed KSh 465 million as returns on his investment but the court ordered the two defendants to pay Kiarie KSh 300 million plus interest since 2003. In total, the amount added up to KSh 418 million.

    In 2016, Rwandan tobacco tycoon Tribert Ayabatwa Rujugiro filed a multimillion shilling suit against Kenyan investment bank Dyer & Blair, accusing the broker of selling his Safaricom shares and failing to speedily pass on the sale proceeds to him.

    Mr Rujugiro wanted Dyer & Blair ordered to pay him damages for withholding proceeds of the share sale for 135 days, and for paying him after fluctuations of the US dollar rate negatively affected his returns.
    In 2016, Dyer and Blair executive was accused of aiding a Sh100 billion money laundering scheme at one of Kenya’s largest chartered flight operators — Bluebird Aviation. The allegations made in court by a founding shareholder of the Wilson Airport-based carrier have sucked in Mohammed Hassan a former top executive of Dyer & Blair Investment Bank. Mr Hassan, who started off as a finance analyst at Dyer & Blair before rising to become the investment bank’s executive director, was accused of being the conveyor belt linking Bluebird’s accounts to the pockets of Mr Hassan’s partners.

    Mr Hassan was Dyer & Blair’s executive director between 2003 and 2006, and was previously the investment bank’s general manager.

    Yusuf Abdi Adan, the Bluebird Aviation shareholder, has claimed in court that his partners have been using Mr Hassan to fraudulently channel massive funds out of the company as part of a scheme to sideline him and pocket his rightful share of the company’s profits.
    “The three directors have through Dyer & Blair invested massively in both local and international stocks and shares. They have also bought several properties in Nairobi, Coast and Rift Valley. In a single transaction involving NBK, the three directors paid Sh300 million in cash,” the Bluebird co-founder said on the claims that the bank was being used in money laundering.

    Dyer & Blair Chairman and CEO Jimnah Mbaru is one of Kenya’s prominent investment bankers. He led a group of local shareholders in acquiring the entire shareholding of Dyer & Blair from Kenya Commercial Bank (KCB) in 1983.

    Dyer & Blair was founded in 1954 in Nairobi as a partnership of stockbrokers Hickman and Grey. Ownership of the firm changed hands in 1956 to Derek Ingram Dyer & Patrick Murdoch Blair before it was acquired by KCB in 1973.Since Mbaru took over in 1983, the firm has played an instrumental role in some of the biggest deals by publicly listed firms across East Africa. It converted into a fully-fledged licensed investment bank in 2004.

    The firm operates in East Africa through its wholly owned subsidiaries in Kenya, Uganda and Rwanda and is a member of the Nairobi Securities Exchange (NSE), Uganda Securities Exchange (USE) and the Rwanda Stock Exchange (RSE).

  • Treasury moves M-Akiba away from NSE to the Central Bank

    Treasury moves M-Akiba away from NSE to the Central Bank

    Summary

    • The latest policy shift is intended to revive the performance of the debt instrument, which was launched in June 2017 to deepen the Treasury bond market and promote financial inclusion.
    • Under the initial arrangement, the Central Depository and Settlement Corporation (CDSC) was tasked with being an issuing and paying agent for M-Akiba on behalf of the government, while the NSE was in charge of facilitating the online trading of the bonds through its systems as well as providing customer service support through a helpline.
    • Regionally, the Dar es Salaam Stock Exchange is seeking to engage the Ministry of Finance and Planning for the development of micro-savings products.

    Kenya’s National Treasury has shifted the issuance of its mobile-based government bond programme, known as M-Akiba, to the Central Bank, away from the Nairobi Securities Exchange and the Central Depository and Settlement Corporation.

    This is after the failure of the initial retail bond due to poor timing, low understanding of the product and weak customer care practices that led to under subscription.

    The latest policy shift is intended to revive the performance of the debt instrument, which was launched in June 2017 to deepen the Treasury bond market and promote financial inclusion.

    “We want M-Akiba to be spearheaded by our fiscal agent, which is really our intention. We want them to be the primary issuer of this instrument. The Central Bank of Kenya (CBK) has better infrastructure, they have better capability and it sits well in the context of financial inclusion, of which the bank is also supportive,” Haron Sirima, a director-in-charge of public debt management at Treasury, told The EastAfrican in an interview last week.

    “We have not abandoned it, but we have learnt a number of lessons. CBK would be the most appropriate entity to speak to as the primary issuer of government securities,” he added.

    Initial arrangement

    Under the initial arrangement, the Central Depository and Settlement Corporation (CDSC) was tasked with being an issuing and paying agent for M-Akiba on behalf of the government, while the NSE was in charge of facilitating the online trading of the bonds through its systems as well as providing customer service support through a helpline.

    “M-Akiba was being issued by NSE and CDSC on a pilot basis. Given the positive response we got from that instrument, we felt that it would be most appropriate for it to be issued by the CBK,” said Sirma.

    Treasury pays CBK 1.5 percent or up to Ksh3 billion ($27.27 million) in fees for each amount of debt raised from the domestic market through Treasury bills and bonds. When the bond was launched, the aim was that the Ksh 1 billion ($9.09 million) on offer would sell out. It even allowed for a green shoe option to expand it up to Ksh 3.8 billion ($34.54 million).

    Although more than 300,000 people registered on the M-Akiba platform atthe initial launch, only 5,988 purchased the bonds, totalling Ksh247.75 million($2.25 million), less than a quarter of what was on offer.

    “The objective of this debt instrument is to deepen financial inclusion. So you don’t look at its success in terms of the amount of money that you raise, but more on the coverage or number of individuals who have subscribed to the instrument,” said Sirma.

    More Kenyans are expected to participate in government bonds by investing a minimum of Ksh3,000 ($27), which is considerably lower than the Ksh50,000 ($454.54) required to invest in other Treasury bills and bonds.

    The cost of buying and selling a Treasury bond in the secondary market on a phone is estimated at 0.335 percent of the value of the transaction, excluding the mobile money transfer charges for loading or withdrawing money from the mobile wallet.

    In comparison, the cost for trading in the conventional government bond is 0.0384 percent of the value of the transaction. This comprises brokerage commission (0.024 percent), CDSC Bond levy (0.002 percent), Capital Markets Authority bond levy (0.0015 percent), Investor Compensation Fund bond levy (0.004 percent), NSE Bond levy (0.0035 per cent) and VAT on brokerage commission (0.00336 percent).

    Regionally, the Dar es Salaam Stock Exchange is seeking to engage the Ministry of Finance and Planning for the development of micro-savings products.

    In 2019, Uganda announced that Cabinet had approved the trading of government securities through mobile phones to boost savings and investment among citizens, and drive economic growth.

    Kenya’s National Treasury has decided to shift the issuance of its mobile-based government bond programme popularly known as M-Akiba to the Central Bank away from the Nairobi Securities Exchange (NSE) and the Central Depository and Settlement Corporation (CDSC).

    This is after the initial flop largely triggered by poor timing, poor understanding of the product and weak customer care practices leading to massive under subscription of the maiden retail bond.

    The EastAfrican has learnt that the latest policy shift is intended to revive the performance of the debt instrument which was launched in June 2017 with a view to deepening treasury bond market and promoting financial inclusion.

    “We want M-Akiba to be spear-headed by our fiscal agent (CBK), which is really our intention. We want them to be the primary issuer of this instrument. CBK has got a better infrastructure, they have better capability and it sits well in the context of financial inclusion of which the bank is also supportive,” Haron Sirima, a Director-in-charge of Public Debt Management at the National Treasury told The EastAfrican in an interview last week.

    “We have not abandoned it but we have learnt a number of lessons and I think again that is really where CBK would be the most appropriate entity to speak to as the primary issuer of government securities,” added Dr Sirma.

    Under the initial arrangement CDSC was tasked with the role of being an issuing and paying agent for M-Akiba bond on behalf of the government while the NSE was in-charge of facilitating the online trading of the bonds through its systems and also providing customer service support through a helpline.

    “ M-Akiba was being issued by NSE and CDSC on a pilot basis and given the positive response we got from that instrument we felt that it would be most appropriate for it to be issued by the CBK as primary issuer of government securities,” said Sirma

    The National Treasury pays CBK 1.5 percent or up to Ksh3 billion ($27.27 million) in fees for each amount of debt raised from the domestic market through treasury bills and bonds.

    According to a survey by Financial Sector Deepening (FSD) Kenya the number of retail customers purchasing the M-Akiba bonds proved to be low despite the much excitement and interest when the bond was piloted and launched on June 30 2017.

    The bond was launched with much fanfare and great hopes that the Ksh 1 billion($9.09 million) on offer would also sell out and even allowed for a green shoe option to expand it up to Ksh 3.8 billion($34.54 million) subject to investor appetite.

    Although over 300,000 people registered on the M-Akiba platform only 5,988 purchased the bonds during the official launch totaling Ksh 247.75 million($2.25 million), less than a quarter of the Ksh 1 billion($9.09 million) on offer.

    However according to the National Treasury the main objective of the M-Akiba bond is not necessarily to raise financing for budgetary support but to promote a national savings culture and enhance financial inclusion.

    “ The while objective of this debt instrument is really to deepen financial inclusion so you don’t look at its success in terms of the amount of money that you raise but more on the coverage or number of individuals who have subscribed to the instrument. That is how we measure its success rate,” said Sirma

    The idea of the mobile traded government bond was mooted in 2011 by both the National Treasury and the Central Bank to deepen and enhance financial inclusion through leveraging on increased mobile phone penetration to democratize access to formal financial systems for savings and investments.

    More Kenyans were expected to participate in Government bonds by investing a minimum Ksh 3,000.00 which is considerably lower in comparison to the minimum Ksh 50,000 ($454.54) required to invest in other Treasury bills and bonds.

    Last year (2020) the National Treasury said it would review the cost of trading in government securities to boost the uptake of treasury bonds as an avenue for savings and investments after poor performance of the M-Akiba bond.

    Yes those (cost elements) are some of the things that we need to look at but you see you can’t look at M-Akiba Bond independently from the conventional bond because it is one and the same thing any way. They are all government securities,” Sirima told The EastAfrican last year (2020).

    “You know the Public Finance Management (PFM) law requires that in raising resources through borrowing you need to look at both the cost and risk elements. So it is not appropriate to just look at the cost element independent of the risk.”

    Total cost for buying and selling a treasury bond in the secondary market through the phone was estimated at 0.335 percent of the value of the transaction excluding the normal mobile money transfer charges for loading or withdrawing money from the mobile wallet.

    On the other hand the total cost to an investor for trading in the conventional government bond is estimated at 0.0384 percent of the value of the transaction.

    This comprises Brokerage commission (0.024 percent), CDSC Bond levy (0.002 percent), Capital Markets Authority bond levy (0.0015 percent), Investor Compensation Fund bond levy (0.004 percent), NSE Bond levy (0.0035 percent) and Value Added Tax (VAT) on brokerage commission (0.00336 percent

    Regionally, Dar es Salaam Stock Exchange (DSE) is seeking to engage the ministry of finance and planning(MOFP) for the development of Micro-savings products popularly known as ‘M-Akiba bonds’ as part of its five-year (2018-2022) growth and development plan.

    In 2019 the Ugandan government announced that the cabinet had approved the trading of government securities through mobile phones to boost savings and investment among ordinary Ugandans as well as drive economic growth.

  • Kakuzi Abandons ‘Vexatious’ Lawsuit Aimed At Silencing Critics On Rights Abuse At The Avocado Farm

    Kakuzi Abandons ‘Vexatious’ Lawsuit Aimed At Silencing Critics On Rights Abuse At The Avocado Farm

    Kakuzi avocado farm has been holding into every string of hope after their reputation was dented with the expose of historical atrocities that have been documented, continues to grasp for air in desperate bid to win international trust after UK supermarkets that provided their biggest market decided to cut links and boycotted their products.

    In March this years, Kakuzi Limited took two lobby groups to court seeking to lift the lid on investigations into rape, killings, and abuses in its expansive farm in Makuyu.

    Kenya National Human Rights Commission (KHRC) and Ndula Resource Center (NRC) are said to have investigated the alleged atrocities by Kakuzi guards and which led to a case in the United Kingdom against Camellia PLC, Kakuzi’s parent company.

    Although Camellia paid Sh696 million as compensation, Kakuzi in its case says that KHRC’s claims on what allegedly transpired is untrue and should be forced to produce the report of its investigations to the police, or before a magistrate.

    Kakuzi says in its case filed before the High Court that it wrote to KHRC and NRC demanding that they either report to the authorities or be forced to admit that they had no evidence to support the claims by 85 people and delete an article published in KHRC’s website.

    Those who sued Camellia are 79.

    “It is incredulous for the respondents to state that they have been investigating the petitioner for the last 17 years yet no report has ever been disclosed to the petitioner,” the case filed by Kakuzi’s lawyers Kaplan and Stratton reads in part.

    “Accusations of killings, rape and other forms of sexual and gender-based violence causing grievous bodily harm, abominable labour injustices, wanton violence, bad corporate governance are extremely serious accusations and must, as of right, be substantiated with sufficient evidence to support the charge before a court of law,” said the lawyers.

    Kakuzi denies that there were such crimes happening on its land where it grows among others crops avocados. It argues that if they occurred, then KHRC and NRC are complicit in shielding the perpetrators.

    According to Kakuzi, its business has been adversely affected by the claims.

    “The only inference that can be drawn from the respondents conduct in refusing to provide the petitioner with the information sought and or in laying a complaint as provided under the law for each and every accusation in the article is false, misleading, and devoid of any evidentiary material,” the case continues to read.

    Kakuzi, The Nairobi Securities Exchange (NSE)-listed firm says that it was dropped in the UK case.

    In the case, Camellia PLC was accused of turning a blind eye to systematic human rights abuse by Kakuzi Limited employees including rape, killings, attacks, false imprisonment, and mistreatment for a period of 11 years.

    The victims’ lawyers Leigh Day, had claimed that Kakuzi security guards have been inflicting unexplained harm to the locals surrounding its plantation.

    The 85 victims include Kakuzi former employees, women, and girls who were allegedly raped by the guards after being caught while collecting wood on the company’s land. Some are said to have contracted HIV or became pregnant. They included 10 women and girls, including two who are less underage.  A young man was claimed to have been clobbered to death by the guards.

    Shortly after the UK case was settled, Kakuzi took the charities that supported alleged victims to court in Kenya. 

    When contacted last week by The Times and asked whether it was a “vexatious” case designed to silence criticism, Kakuzi suddenly decided to withdraw it.

    “Corporates are increasingly weaponising the law to burden their critics with the heavy cost of legal defense, to intimidate and silence them until they abandon their criticism. This is the strategy Kakuzi has employed.” Said Mary Kambo, Program manager on trade and Labour justice, Land and resource governance at KHRC.

    “This legal strategy is commonly known as a strategic lawsuit against public participation (SLAPP). SLAPPs can be successfully resisted as was recently shown by the South African ruling in Mineral Sands Resources v Reddell where the court recognised the defamation suits as SLAPPs! The SLAPP suit by Kakuzi presents a unique opportunity for our courts to shape jurisprudence on SLAPP suits. Some jurisdictions have passed anti-SLAPP laws to prevent people including corporates from using courts to intimidate and muzzle their critics.“ She aimed at Kakuzi on the filing of the suit.

    “The Company is acting like a jester! To the extent that its parent Company has agreed to settle the human rights violations claims against it simply shows admission of liability by the Company. A laws suit against the CSOs is not the way to clear its very tainted reputation!” Said Nasanga Aki, Kenyan high court advocate in reaction to Kakuzi’s suit.

    “Kakuzi is a corporate bully playing Victim.“ Olang Kolang, an advocate also commented.

    On 14th February 2021, the two organizations released a press statement immediately after the compensation news came out and it is the statement that angered Kakuzi who were desperate for a clean image.

    The press statement was in reaction to a costly settlement by Kakuzi’s parent company, Camellia PLC, over gross human rights violations alleged to have been committed by one of its subsidiary companies, Kakuzi.

    On 11th February 2021, Camellia announced to its shareholders and traders that it would spend up to Kshs. 694 million to settle individual claims as well as pay legal fees for claims of gross human rights violations committed by Kakuzi security guards. These claims had been lodged in the London High Court by Leigh Day, a leading UK law firm that partnered with KHRC and NRC to bring the suit against Camellia. The UK suit comprised of 85 claimants who live around Kakuzi, with claims ranging from killing(s), assault and rape in the hands of Kakuzi guards.

    Locally and in its suit, Kakuzi is alleged that KHRC and NRC violated its right to a fair trial under Article 50 of the Constitution and that the statement issued on February 14th is untrue and that it damaged Kakuzi’s reputation and that of its shareholders and partners. Kakuzi sought to compel the KHRC and NRC to withdraw the press statement and issue a public apology.

    Further and following the settlement by Camellia, Kakuzi instituted a raft of reparative measures which included (1) funding of charcoal kilns and access to firewood for the local communities to produce and sell charcoal, (2) building two social centres, (3) employing safety marshalls, (4) building three new roads of motorable access by the community without any requirement to obtain a licence from the company as was previously the case (5)  establishing of a Technical Working Group to survey and demarcate land which has been previously donated by the company, and (6) designing and implementing a human rights defenders policy. “These measures were not instituted as part of a corporate social responsibility (CSR) programme. They were part of a desperate attempt by Kakuzi to restore its UK market lost in the wake of media reports on Kakuzi’s nefarious behaviour towards its host community and workers.” KHRC said in a statement.

    In reaction to the settlement deal, the two human rights groups reiterated that there were pending issues outlined in their February 14th statement that took that to court with the SLAPP suit making the following DEMANDS:

    1. That the Murang’a County Assembly ensures that Kakuzi land leases are not renewed until all claims on historical land injustices are resolved.
    2. That the UK market sustains the current boycott of Kakuzi produce until all pending claims are addressed. We will further initiate an engagement with other Kakuzi markets to boycott any produce coming from Kakuzi until there is demonstrable change in attitude and behaviour on the part of Kakuzi.
    3. That the national Parliament and the Senate immediately investigate Kakuzi on all the pending claims and institute appropriate accountability measures against the company.
    4. That the National Land Commission implements forthwith, its decision of February 2019 directing the surrender by Kakuzi of ALL public utilities on its land including schools, markets, police stations, hospitals, public roads of access, wayleaves and easements to national and county government as appropriate.

    KHRC and Kakuzi PLC have been engaged in legal feuds spanning over 17 years over land issues and allegations that the firm has been violating the rights of members of the public. The feuds saw KHRC partner with a UK-based law firm Leigh Day to sue Kakuzi’s parent company Camellia PLC at a London court over the alleged abuses. They at one point accused of tampering with witnesses by luring them with goodies to withdraw from the case claims which naturally Kakuzi denied.

    Cornered Kakuzi perhaps for fear of more damages to the bad reputation they’ve propagated, are withdrawing the suit.

     

    Even as the firm is cooking its heels, trouble seem to be a committed partner, a recent report by BBC revealed more cases of abuse in the firm.

    “I was caught like that and he was catching me here like this. I was taken round. He stood up and stepped on me. He stepped on my neck. He held my neck and turned it around. He covered my mouth while I screamed.” Mudhikwa Musau, 88, lives in a village just a few minutes’ walk from the tree-lined perimeter of Kakuzi’s vast farmland in central Kenya, demonstrated how the assault was carried out.