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James Mwangi’s Equity Group funds Kigali Financial Towers with $100-million investment

Rwandan President Paul Kagame participated in the groundbreaking ceremony of the project.

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James Mwangi.

Equity Group Holdings, a leading financial services group led by Kenyan multimillionaire businessman James Mwangi, plans to invest $100 million in the construction of Kigali Financial Towers through its venture capital arm, Equity Holding.

The twin towers, which are slated to open in two years in the Kigali International Financial Center, will play a key role in attracting financial institutions to Rwanda, including investment banks, according to Equity Group Holdings.

Rwandan President Paul Kagame participated in the groundbreaking ceremony for the project. He stated that Rwanda aspires to become a global financial hub and Equity’s flagship projects align well with this goal.

“Equity and all those investing in our country have our full support. I assure all investors that every dollar you invest in Rwanda will pay back,” he said.

Speaking at the Commonwealth Business Forum in Kigali, Mwangi, the chairman of Equity Group Holdings, said COVID-19 exposed the unsustainable nature of today’s economic and social order.

“It demonstrated to the world how unsustainable the world had been built,” he said. “The business had lost trust with the host community; inequality had reached a level unprecedented in history. Globalisation, competitiveness, economies of scale; the theories upon which the world was being built have been put to question because, at the end of the day, it was all about availability.”

He added that it is vital to improve agricultural productivity internationally to fight food inflation.

East Africa

Kenyan banking magnate James Mwangi loses more than $6 million in June

Mwangi’s loss comes on the heels of a reduced appetite for emerging market shares.

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Kenyan banking magnate. James Mwangi.

James Mwangi, a Kenyan multimillionaire banking magnate, recorded a Ksh715.7-million ($6.07-million) loss on his Equity Group stake in June amid a market-wide sell-off on the Nairobi Securities Exchange, as shares in the Kenyan banking group finished the first half of 2022 with a significant decline.

Mwangi’s multimillion-dollar loss in his Equity Group stake comes on the heels of a reduced appetite for emerging market shares after central banks in developed markets raised interest rates in an effort to curb the surge in inflation caused by increases in energy and food prices.

Equity Group Holdings Limited, the largest financial services group in East Africa, is the second most valuable company on the Nairobi Securities Exchange (NSE), with a market capitalization of Ksh151 billion ($1.28 billion), accounting for about 7.88 percent of the NSE’s total share capitalization.

Mwangi, who was instrumental in the growth and transformation of Equity Group, Kenya’s leading financial services provider, owns a sizable 3.38-percent stake in the company, totaling 127,809,180 shares.

Equity Group shares on the local bourse have fallen from a price of Ksh45.5 ($0.386) at the start of June to Ksh39.9 ($0.339) at the time of writing this report, resulting in a 12.3-percent loss for shareholders in just 30 days.

As a result of the double-digit decline in the group’s shares since the start of June, the market value of Mwangi’s stake has decreased by Ksh715.73 million ($6.07 million), from Ksh5.81 billion ($49.36 million) on June 1 to Ksh5.1 billion ($43.28 million) on June 30.

Equity Group shares have fallen by 24.36 percent since 2022 began, as investors continue to sell their holdings in the group despite it reporting a 36percent increase in profit from Ksh8.7 billion ($74.9 million) in the first quarter of 2021 to Ksh11.9 billion ($102.4 million) in the same period of 2022.

This follows the lender’s record-high profit of Ksh40.1 billion ($350.2 billion) in 2021, which boosted its financial position and resulted in the payment of a dividend to shareholders amounting to Ksh11.3 billion ($97.25 million).

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East Africa

Kenyan businessman Paul Ndung’u takes legal action over control of SportPesa assets

The move comes nearly two years after the SportPesa brand was relaunched.

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Kenyan businessman Paul Ndung’u.

Paul Ndung’u, a Kenyan businessman and executive, has taken legal action to join the ongoing court case to determine control over assets related to SportPesa, including the trademark and Web domains.

The Kenyan businessman’s move to determine control of assets related to the gaming platform comes nearly two years after the SportPesa brand was relaunched under Milestone, a group controlled by Ronald Karauri and other investors linked to Pevans East Africa, the defunct holding company that pioneered betting in Kenya through the SportPesa brand.

Pevans East Africa ceased operations in 2019 after losing its license for alleged non-payment of taxes totaling Ksh95 billion ($806.5 million) and concerns about increased gambling addiction.

Some of Pevans’ founders, including Karauri, relaunched the sports betting brand, prompting legal action from partners, most notably Asenath Wachera Maina, the largest Kenyan stockholder in the defunct holding company, who accused Karauri of an illegal takeover through Milestone Games.

While participating in the case that will determine the fate of SportPesa’s core assets, Ndung’u revealed that, in addition to being excluded from ownership of Milestone, which now operates the SportPesa brand, his stake in the multinational Sportpesa Global Holdings Limited (SPGHL), which owns gaming subsidiaries in key markets like Tanzania and the United Kingdom, has been diluted.

In an affidavit, Ndung’u said Karauri and Robert Macharia have interests in both Milestone and Pevans, but chose to take actions that are detrimental to the latter without disclosing their conflict of interest to the court.

Since its inception in Kenya more than six years ago, SportPesa, a leading sports news and betting technology company with operations in Kenya, Tanzania, South Africa, Nigeria, Italy, Ireland, and the Isle of Man, has grown into a global gaming company with more than 500 employees and offices in six countries.

According to court documents presented by Ndung’u, the brand, which was built through heavy marketing and sports sponsorship by Pevans at a cost of more than Ksh5 billion ($42.4 million), experienced massive growth prior to the cancellation of its operating license in 2019.

Before its operating license was revoked in 2019, Pevans had distributed to partners a total of Ksh7.6 billion ($64.5 million) of its profit of Ksh12.9 billion ($109.5 million) over the previous four and a half years to June 2019.

During the 4.5-year period, Karauri and Ndung’u received dividends totaling Ksh1.835 billion ($15.8 million).

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East Africa

Court of Appeal blocks sale of real estate assets owned by Ugandan magnate Patrick Bitature

The decision comes at a crucial time for Bitature.

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Ugandan magnate Patrick Bitature.

The Court of Appeal in Kampala, Uganda’s capital city, has once again blocked the advertisement and auctioning of four prime properties owned by Ugandan magnate Patrick Bitature.

The auctioning was spurred by a $30-million loan dispute between the leading businessman and Johannesburg-based Africa-focused fund manager, Vantage Capital.

The injunction issued by Christopher Gashibarake, the sitting judge at the Court of Appeal, comes after the Commercial Division of Uganda’s High Court denied an earlier application by entities owned by Bitature to prevent the sale of his properties held under Simba Properties Investment and Simba Telecom.

The recent Court of Appeal decision in the long-running loan dispute comes at a crucial time for Bitature, who has been at odds with Vantage Capital after the Africa-focused fund manager threatened to auction off his real estate empire in Kampala.

The 30-unit Elizabeth Royal Apartments in Kololo, the Skyz Hotel in Naguru, and the Moyo Close Apartments in Kololo, a residential and commercial neighborhood in Kampala, are part of the Ugandan magnate’s Kampala real estate empire.

What began as a promising partnership in 2014, when Bitature received $10 million from Vantage Capital to invest in the Moyo Close Apartments and Skyz Hotel in Naguru, has quickly devolved into an estranged alliance, with reports claiming that the businessman has yet to repay the lender.

Companies associated with Bitature are also embroiled in a separate legal battle with Absa Bank over a multimillion-dollar loan.

When confronted with the repayment of the $10-million loan that he obtained from Vantage Capital, which has tripled in value to about $30 million after interest, charges, and penalties, Bitature said difficulties arising from delays in Uganda’s oil and gas sector undermined his ability to repay.

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