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Sunday, January 20, 2008

Who Actually Owns Equity Bank?

By a Guest writer (Mark)

Besides the fact that Transcentury holds a direct stake in Equity bank, it also holds a stake through Britak which in turn has a large shareholding of Equity Bank.

Recently, Transcentury also bought the maximum stake allowable for one shareholder of a bank in Kenya (24.9%) though their holding in Helios EB Partners. Helios Partners is a foreign incorporated company that recently got new investors in the form of Transcentury and more than half the money invested by Transcentury ($300M = Ksh 19.5B) came in to increase the capital of Equity Bank (This amount was approx Ksh 11B). The Finance Minster decided to look the other side as this transaction happened right under his nose. He even gave this group the exception from any scrutiny of who the shareholders are for 9 years.

Essentially, we will never know who the investors are for 9 years in this bank. Why would the government official make an unprecedented decision to exclude them from a regulation to protect consumers in such a sensitive sector? The reason could be to be to hide the fact that the ‘foreign investment’ is actually local investors and the fact that the same local investors have violated the max. Shareholding rules for banks. Picture this…

• Maximum Shareholding allowable to a shareholder who is not an executive = 24.9%

• Equity bank holding through Britak = 10%

• Equity Bank holding as Transcentury directly = aprox 3+%
Clearly, Transcentury now holds more that 38% of Equity Bank!

Proof of this available on: http://www.transcentury.co.ke/transcentury/portfolio.asp

For the government officer involved… what was in it for him? For the government? Think of Equity bank chairman in London with PNU chaps openly campaigning for PNU and rubbishing ODM… do you start to get the answers?

Issue with Diversity at Equity Bank:

We have established that the majority shareholder is Transcentury, now other issue is almost all senior managers of the bank are from one community. Over 85% of the employees in the bank are from the same community. The converse is that more than 50% of the banks customers are drawn from all the ethnic communities of this country. How do you support a company that does not promote diversity? There are multitudes of Private companies that do not promote diversity, but the duty for a listed company is to represent all Kenyans in its workforce and Equity is not exempted. If they exempt themselves, then we tell their customers so they can choose if that’s acceptable.

Business Model:

Most people defending Equity bank never fail to mention that it has helped the poor and I support that, but this particular business model targeting the millions at the bottom of the pyramid is no longer unique to Equity Bank. We have leading financial institutions like Barclays, KCB following suit and doing it well with their deep pockets. KCB as a local bank and deserves our support, Barclays too because in as much as it’s about capitalism for its shareholders, they promote diversity internally in their recruiting.

IPO (initial Public offer)

Please note that Equity bank is the only listed company that got listed on the NSE without selling any new shares, so it wasn’t an initial public offer per se but a listing. The difference is it retains the exact shareholding when on the NSE as before with no dilution at all. These and only these shareholders were able to benefit with this listing, and later, the secondary buyers and sellers on the NSE. The best way to say this is they got credibility out of the listing without offering anything to the public.

Tell tale signs of the success of the Boycott:

• A day after word spread around on this, I had a chat with some staff members and one mentioned that they stopped 2 days ago paying cash against uncleared cheques even for a fee.
• Share starts the downward trend and will be a good sign that ODMs strategy is working.
• Few to no deposits in Equities branches in Western and Rift Valley. The first sign of a run on the bank and I am sure the CBK will come and rescue them by closing these branches due to the ethnic connections they have.
• Equity bank website www.equitybank.co.ke is now down. Reason? You and I can speculate that they have something to hide… I was looking for the IPO briefing document that listed the largest shareholders, but doubt you will find it again. I had to revert to an earlier download.

Eventually really, if they can balance the staff and hiring to represent the face of Kenya without bias, and I am sure they can find skilled talent from all ethnic communities, though they choose otherwise, then the boycott should be re-considered.

(Kumekucha: Please publish this as a contribution article to kumekucha instead of a s a comment. Hopefully this will provide a forum to justify the reasons why these institutions have been selected for the boycott and you can call on more articles on Brookside, Citti Hoppa etc

Another suggestion on the boycott campaign is to brand it a “Kenyan Company Diversity” campaign to show that this is not about one community but ensuring a better Kenya for all)

-Mark-

23 comments:

Anonymous said...

The major partners in Helios EB are OPIC (US-Government owned Overseas Private Investment Corporation) and CDC Group (UK-Government owned Finance Group - now registered as an 'independent' comany), as well as George Soros, an American Billionaire whose sources of financing have been questioned also in court (connecting it to drug money, laundering illegal money etc.).

Helios EB is entering as a partner for a limited time (normally 10 years) and is then 'harvesting' their investment (capital and a nice amount of interest to be repaid by the 'partner' ..... so in reality they are giving a loan backed up by shares .....

Conclusion:

Equity - via Helios EB - belongs now to the American and British Government and some other doubtful people - and if Equity is not successful and cannot repay the money invested (plus interest), Helios EB will take over the whole Bank and 'throw' it to the financial 'wolves' ....

Anonymous said...

Chris - At the end of the day those employed by Equity are Kenyans like you and me. Brother, why do you have this hate for one community? What have they done to you, that a mere employee is a criminal. The crime? employee of equity. I never thought you could stoop this low. We are all in it together. Brookside in Ruiru, the GM is even a luo - Go ahead and boycott, this is the majimbo Chris and your people have been advocating. The Kikuyus will support their companies be they equity, brookside, city hoppa etc - Dont worry they will survive. Unfortunately we also own KCB and Barclays - your darling banks. Its the issue of the left and the right arm. Good luck Chris, am pretty sure you will not publish this, but teh facts remain. Kikuyus will never seek revenge unless pushed to the wall. For now you and your people continue the dishonourable thing - keep on killing, the Living God says " vengeous is his" Kila la heri. Wipe the community, get the land, kill the companies, massacres them as you wish - a day of judgemnet will hang on you - one day one at a time. It could a hundred years - but it wil come. Continue brother spreading hate and keep enjoying as Kenyans die. Enjoy teh killing fields and bask on the flames.

Anonymous said...

If you have proof of this send it to the FT, they had an article on Helios (ft.com). If only hearsay, don't try to talk up a run on the bank which would just dammage kenyan depositholders.

Pandora

Sayra said...

At times the shallowness and short sightedness and ignorance of some Kenyans like you Mark make me wonder and many times makes me feel like crying.

1st - transcentury is made up of a group of men (who are now old) who came together in the mid 1980s and started contributing money with the end vision of investing. At the time they were 20 of them, at the moment i have idea how many they are. They each contributed a certain amount and later started their own investments ... to me those are smart individuals who thought of how to be finacially free 'early' enough ... that is not a crime. So if they have invested in Equity is that a problem? i dont see that been a problem ... why dont you also name the other very many comapanies they have also invested in ... and can you explain to us why equity is your only main interest- to me, i think your just been a hater ...

The other banks that you have mentioned are in Kenya, kenyans decide where to go for their banking services and if many of them prefer equity to others ... ask them why, am sure they have a pretty good reasons why.

Ati IPO ... when equity went public, they never needed any extra cash for any of the expansions that they were doing ... so why collect cash you don't need?

Lemmi take my time here and tell you that equity started sometime in 1985. And it has had its operations in central till 1997 ... now in your capacity of thinking ... does it look unsual that most of the staff are from central? And now that you claim that 85% of the staff are from one community ... where did you get your facts from?

The staff member that told you they stopped paying uncleared cheques ... told you what you wanted to hear. I just made a phone call and the cheques are been cleared. And their website is up.

Mark ... kenyans dont need your lies and worse of all the haterz attidute you and others like you have. And all the bycott crap been fuelled by you and all the others ... to me its total bullcrap. In the end its the ordinary mwanachi who will pay for your cheap actions and bycott campaigns

chris said...

Anon @ 12:36

I don't hate any community. But I like free open discussion about pertinent issues affecting Kenyans. But I'll tell you what I hate with a passion. People who want to frustrate the will of the people even after Kenyans lined up for hours to vote (some spending the night at polling stations).

And my friend this has nothing to do with tribes. The main architects of vote rigging was an individual who happens to be a Kikuyu from Othaya but he was greatly assisted by many other tribes including Kalenjins and Luos and most of all by Americans.

-Kumekucha-

Anonymous said...

Sayra - it is true that almost all of the Equity Directors come from one community - that's a fact and you can 'google' it if you want to get your facts together.

It is true that Equity was founded in the 80's - but originally as a Financing Institution for Housing -
they became a Bank after some people 'discovered' the profit possibilities and 'invested' in housing including people like Cyrus Jirongo .... got me?

What is more disturbing and worrying is the fact that these major shareholders who entered in December 2007, are in reality UK- and US-Government bodies .... whose goal is to take control of the financial market in all East Africa with expanding Equity Bank to Tanzania, Uganda etc. etc.

So - if you are honest - you will agree that this is a highly political matter. Equity is used to spread their political goals - and in no way it is meant to 'help the poor in Africa' as they claim.

Got me ???????????

P.S. I am not a communist - but I am concerned that Kenya and the Kenyans are used (you can also call it mis-used) by certain groups and governments who are only interested to secure their influence ...... and give a 'shit' about the rest !!!!!!!!!!!!! definitely not about the African people ........ !!!!!!!!!!!

demogod said...

The problem with Kenyans is that they believe that every organization that is public, and that is grown because of the few individuals who came together and used their brains.

Let me be very frank here, there are few organizations in Kenya that have grown through genuine means, by that i mean, they worked their ass of without any political connections, bribery etc etc..

Kenya has never been a fair playing ground for entrepreneurs, it mostly controlled by the "elite", and its growing networks. Its who you know in the government or the elite circle that can get you somewhere or no where!

Although I would like to believe that Transcentury has done wonders in their business model because of a few individuals is just a pipe dream. Transcentury is just a vehicle for the top brass of the country to have their corrupt money turn into white! It is a vehicle for the top brass to control vast companies and resources in Kenya, thus to dominate the businesses and economy in this country.

In short, they have become smarter in terms of how to acquire companies and resource of Kenya through a so called "genuine" corporate organization. Let's call it "official" corruption!

Just think about it, how quickly it has transformed the corporate scene in Kenya, and how quickly they have grown and acquired funding. To the blind eye it is an amazing feat of brilliant men at the helm! But, if you really look closely at the skeleton, you will find the real details of the nature of this organization.

There are many hidden agendas that are now occupying Kenyan coirporate businesses, and you seriously to understand where this is going. In no time, the top brass of Kenya will own most of Kenya, and there is nothing anyone can do because it is so called "legally" acquired!

Ask yourself, why would you give a 9 year exemption to an organization not to disclose the real shareholders! WHY? What makes this organization so special?

Please Kenyans, you all need to open your eyes, there are many areas of our country that is now slowly being taken over by a few individuals, and it will now rapidly become a norm, if things are not checked!

Always ask the question, WHY? Don't believe everything you read in the Kenyan media, there is a lot of "untold" truth that is out there!

Anonymous said...

Ask yourself why Chris Kirubi is always hanging around state house yet he is no civil servant or politician.

Bobie said...

Chris - as long as we are following up these multitudes of crass and rather ludicrous suggestions of boycotting certain companies….

When are you guys going to actively push for the boycotting of Tusker..? Another ostensible Kikuyu product as some would have you think!

Sayra said...

Anon 2.03am,
honestly i dont get you. Am not disputing the fact that most of the directors are from one community ... that is obvious. That it was started as a financing institution for housing, i disagree. It started out as a 'bank' where the people in Kangema amoung its 1st branches took their money for savings. Later on they thought they can go into financing housing ... but their plans backfired and they went back to 'banking'. And they went back to the drawing board and found a niche they could survive on ... and that is what we call having an entrepreneural mindset. Every businessman does what will work for him/her, and it should not be unusual that equity did that.

From what i remember equity was a company like any other, until the day their chairman gave cash for PNU campaign and since then the bank became political to some of you. To me that was a major blander for business but also remember its his cash ... he can do whatever he wants to do with it.
That the new shareholders are UK & USA? really ... i dont know about that. But what i can tell you, equity expanding to Tanzania, Uganda, etc was not an idea born the other day ... from what am been told its been there for about 2yrs now, and soon they will be having ATMs in Tanzania if there not already there.
From what you have written i can bet that you dont have an account with them, thus you have no idea on how their products are like, and that is the reason you are saying that there is no way equity is meant to help the poor ... reasoning on that would be zero work. Kindly look for someone with an account with them and ask them how its like to bank with equity.

Demogod,
I agree with you that Kenya has never been a fair playing ground for entrepreneurs. But the biggest hindrance has been kenyans against kenyans. Like you are seeing here some would rather go to barclays than to equity who even have better services. We are still suffering from colonial mindset.

To all the kenyan entrepreneurs who are coming to invest here, it would be a wise things to consider on how to deal with haterz from within.

Anonymous said...

cleptocracy and tribalism will kill Kenya

Anonymous said...

Mwangi, Equity Bank CEO, was one of the finance directors in the collapsed Trade Bank. He bought Equity with money that he stole from Trade Bank depositors. This guy should not even qualify to run a bank after what he did to Trade Bank depositors.

demogod said...

Kenya's 'mafia' feel the heat






By Noel Mwakugu
BBC News, Nairobi




The plan by Kenya's opposition to boycott companies run by allies of President Mwai Kibaki in protest at the outcome of last month's presidential election is an astute political move.

For ever since President Kibaki joined the ranks of opposition politics in 1992, he has surrounded himself with a group of close confidants and friends from his days in college.

And it is they who are being blamed for influencing his hardline stance during the ongoing crisis that followed Mr Kibaki's controversial win.


They ["Mount Kenya Mafia"] have realised good profits during his rule and letting go to an individual they do not trust sends a chill down their spine


Haroun Ndubi
Kenyan political analyst

The wealthy old men, most in their late 70s consider themselves as the council of elders but ordinary Kenyans know them at the "Mount Kenya Mafia".

The circle of influential Kibaki friends include Defence Minister Njenga Karume, Nairobi university chancellor Joe Wanjui, and big time investors Nat Kangethe, Joseph Kanyago and Nick Wanjohi.

The multi-millionaires have vast business interests in commercial agriculture, real estate, tourism industry and transport industry.

Behind the scenes

And when Mr Kibaki ascended to power in 2002 after two failed attempts, the time had come to use their influence.






Tribalism debate stoked

Wary of ethnic politics

Apart from a few appointed to prominent positions in his administration, most operate behind the scenes.

Analysts argue that they have taken full advantage of President Kibaki's hands-off style of administration to play a key role in deciding cabinet and top civil service appointments and well paid government contracts.

The president's inner circle has also been instrumental in ensuring who gets elected to parliament in most of central Kenya.

However, during last elections a good number of their candidates chosen by the Party of National Unity (PNU) were defeated at the polls by candidates from smaller political parties.

This was described by political analyst Mutahi Ngunyi as a rebellion against the old order of doing things in the region.

Recent saga

During President Kibaki's five year term, it is argued that their acumen in business has grown considerably.



Many of Kibaki's candidates were defeated at the polls

A key area being pointed out as their core business is the now active Nairobi stock exchange.

Well informed sources there confide that the Mt Kenya Mafia are associated with companies that have in the past couple of years acquired large shares in key government concerns and other profitable companies - often through proxies.

Just before last year's elections, Orange Democratic Movement leader Raila Odinga brought attention to their activities by revealing how underhand tactics allegedly used at the stock exchange were benefiting just a few individuals.

Financial experts this led to the recent saga where the ODM leadership went to court in an attempt to stop Finance Minister Amos Kimunya from selling the government share of the very profitable mobile phone company Safaricom.

Simmering temperatures

Political analyst Haroun Ndubi argues that it is in the spirit of protecting their economic gains that produces hardline political positions within government.

"They have realised good profits during his rule and letting go to an individual they do not trust sends a chill down their spine," argues Mr Ndubi - who is also a human rights lawyers.

When the ODM spokesman Salem Lone announced last week that they would be targeting business concerns linked to the government hardliners, this moved quickly.

The ODM has listed businesses in the banking, dairy, tourism and transport sector to name but a few that will be targeted for countrywide boycotts, beginning this week.

In response, President Kibaki unexpectedly appointed a negotiating team lead by Vice President Kalonzo Musyoka who came third in the race for the presidency, to try to quell the simmering temperatures.

"I think the new tactic announced by ODM has caused some shivers among the hardliners as it would hit where it hurts most," Mr Ndubi notes.

With pressure mounting on Mr Kibaki's disputed presidency and growing divisions within his party only time will tell how long the influence of the "Mount Kenya Mafia" continues.

Joe said...

Sayra,

Your arguments are very naive. Do your research. There are several banks/micro-finance institutions struggling to replicate the equity success story to no avail. Ask yourself why. Is it because they are not led by magicians from Mt. Kenya? Please. Give us a break. I have never and will never bank with them. Thank-you-very-much

Anonymous said...

It would be unfortunate to replace old colonial empire with a local colonial clique of a few individuals and some sons of home guards who have systematically plundered the collective assets of the nation, siphoned them abroad and now bring them back in the country after getting 9 years of “government “protection.

Equity is the flagship of the new generation of the same group, think about it merger and acquisitions, bonds, assets transfers this will be the enabler countrywide TELEKOM worked like a dream. Telekom is a good example – we should be looking at it very very carefully – kickbacks, labyrinth of directors, no bid suppliers, monopoly contractors etc etc that lead to the same people (Group) with what we call “bag men or institutional investors to try and confuse the trail.

The hotel industry – Best prime land systematically transferred to individuals since independence without regard that these were national assets. Transport industry – privatised without regard that these were collective assets no clear bid or valuation of assets made. Financial institutions – most remember when banks were used to fleece the public and empower some members of some communities and then crashed, no major prosecutions from that period, nowadays laws being imposed arbitrarily to facilitate recycling of stolen money to protect identities. Think of it I steal your money with non existent contracts, some I just carry away in bullion, run the money through a series of dubious financial institutions and transactions and come back set up to buy your assets which are being “close circuit privatised “ ( no bid on the cheap – forget about the values floated around those are fictitious fractions of the figures) .Remember these assets were paid for buy your father and fathers fathers through taxes . Now they are arbitrarily being transferred to private hands without payback to public. The Little money that the Government gets from the sale of these assets is directed to development projects in certain areas and or to favoured individuals to facilitate future rip-offs. No wonder a lot of our people to this day and age are living in mud houses, no roads, no drinking water, no sanitation and no proper education, the list goes on.

That’s the nature of the crowd not that they are good entrepreneurs, but they lauder their ill gotten money through CLOSED CIRCUIT PRIVATISING wanainchi assets and by outright grabbing - remember the fires at the city hall and the treasury. Buying communal assets on the cheap with stolen mali ya uma, some just outright grabbing. They screw you twice for lack of a better word and this has been going on since independence. Descendants of the home guards were schooled well. - What on earth would make a regime order the police to shoot to kill its own citizens - EVIL that’s what.

Infrastructure – Contracts and projects being awarded as if they are sweets in the kindergarten, and then all of a sudden during elections some forgotten places are arbitrarily awarded districts and a myriad of meaningless “goodies “- funny enough the only way to get into some of these regions are by helicopter as there are nothing resembling roads due to years of neglect.

Energy – This is a sector to watch if this Government stands you will see major changes because they are truing to make alignments with other countries strong men to control the whole chain, locally the transport and petrol stations have already been conquered, petrol
station licences continue to be given on “ a where do you come from basis “

People should think very seriously of what they wish for, the active generation should accept the fact that their parents were asleep, the big question is do you want to screw yourself and you children. I don’t want my kids or grandchildren to have no alternative but to work in other people sweatshops

Sayra said...

Joe, i have done my research and that is why am commenting here. I aint telling to bank with equity ... read my comments correctly ... am wondering of the selective judgement you people are having.

Copying or replicating another's business model does not mean that you will automatically succeed like the person you are copying from. 1st of all, i wish you had an idea the investment equity has done in their IT platform. Another thing the kind of research those guys have been doing and continue to do. And the last that i know their marketing model. If you had a tip of how they do these things, i assure you you will apologize for calling me naive. So before you bla bla bla to me ... its you who needs to do your research.

sam said...

I don't know much about equity but can someone please tell me about Thuo and Citi Hoppa? I vaguely recall he was the last person to head what used to be called Kenya Bus Service.
Am I correct in saying, shortly after "running it down" he created Citi Hoppa? And now he has made it to parliament...

Thuon said...

Amazing if you think of it, From Kenya Bus Service to City Hoppa and now parliament he is a " made man "

Anonymous said...

The equity site is up and running

Anonymous said...

Those in the know laugh at the ones who throw kicks of a dying horse to try and know. Get you facts right my friend all you have on Equity is hogwash. Please do some more research and do not get your info from some know it all people just walk and talk to the people you seem to be commenting about.

Anonymous said...

Waaaa...
this is seriously some mad hatting. Do u know that every year the bank of Equity takes 5 students from some selected schools (High) and takes them as interns to integrate them in their system so as to keep the inovation of their products as sharp as possible. i bet ull want to tell me that the top five students are also from one community!! And mind u one of this schools is where Ruto has his kid!!!

Tyen said...

What do u expect, they had it first. The best schools colleges, enough looted money to invest in shady deals. Why not, stop harrassing Chris for speaking the truth, a joke is making rounds in Kenya that the equity ATM nowdays converses to you in Kikuyu,lol. What about that. I was in Central the other day and understood why other parts of the country are deprived with regards to infrastructure

Anonymous said...

Everone here is under the same spell...the fact that you support banks...who create money out of nothing and lend it to you at interest is laughable!
I hear people behind Helios and the other shareholders are non-othjer than the rothschilds. A lot of poor people having shareholding in this bank, which has now joined hands with Safaricom. Understand this, debt = slavery. Understand it well, because we are going to be shafted by the financial oligarchs that rule this world.

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