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Kenya’s Capital Markets Authority (CMA) has ordered the directors of Britam Holdings Limited to confirm their role in a scandal involving Kenyan businessman and former Chairman of Equity Group Holdings Peter Munga.
Last week, a Mauritian commission of inquiry revealed a suspicious deal concluded by Munga and several Mauritian officials, which left the island country with a Ksh3.9-billion ($35.9 million) loss in 2016.
According to the inquiry, the multimillionaire arranged the secretive purchase of 452.5 million shares (23.34 percent stake) in Britam Holdings from the Mauritian government.
Britam Holdings is a leading regional insurer with a diversified financial services portfolio listed on the Nairobi Securities Exchange.
The group has an operational footprint in seven African countries, including Kenya, Uganda, Tanzania, Rwanda, South Sudan, Mozambique and Malawi.
CMA CEO Wycliffe Shamiah has scheduled a meeting with Britam Holdings for next week, noting that “the government in Mauritius feels its officers were comprised when clearing the transaction but our investor indicates that it was based on negotiations.”
Then-Mauritian Minister of Financial Services, Good Governance and Institutional Reforms Roshi Bhadain is alleged to have aided Munga to buy the 23.34-percent stake in Britam Holdings for Ksh7.1 billion ($65.34 million) despite higher offers.
Competitors included South Africa’s MMI Holdings and Barclays Bank (now Absa Group), which each offered to buy the stake for Ksh11 billion ($101.24 million). Although Munga had also promised to match their figure, that never happened.
The Kenyan regulator will seek to ascertain if undue influence was exerted in the transaction. “The problem usually is unless the issuer was directly involved in the transactions, shareholders are distinct parties. The listed company may not have control on the shareholders,” Shamiah said.
