Joe Mucheru, ICT Cabinet Secretary, is part of an extortionist gang in Wananchi corporate battle.

Companies associated with Cabinet Secretary for ICT Joe Mucheru and former president Moi’s lawyer Ken Kiplagat have been accused of extorting shareholders and investors of Wananchi Group.

The accusation are part of a suit filed in the high court on May 10, 2017 by Wananchi Group in what is turning out to be the fight for the heart and soul of the integrated communication firm.

Mucheru and Kiplagat are part of a consortium of 120 Kenyans who are shareholders of Africa Telecommunication and Media Technology Fund I (ATMT Fund I), a private equity fund backed by US government that holds majority shares in Wananchi Group.

In the court documents quoted by MoneyandMarkets, Wananchi Group accuses three companies representing the Kenyan interests – Wananchi Nominees, International Consulting and Marketing Services Limited and East Coast Telecoms – of using b*******l and threats to force other shareholders in Wananchi Group to buy them out.

“Since January 2016, the plaintiffs (Kenyan shareholders) have attempted to have their interests bought off by other shareholders and investors. To further this end, they have on numerous occasions engaged in a concerted scheme of intimidation and e*******n from Wananchi Group, its directors, shareholders and investors,” says Wananchi Group in an affidavit sworn by the firm’s chairman Alex-Handrah Aime.

SEE ALSO: Wananchi Group owned Zuku to f**e 300 employees

Mucheru, Njeri Rionge, corporate lawyer Joe Kamau and other Kenyan investors’ hold their interests in ATMT Fund I through Wananchi Nominees while Kiplagat and a group of lawyers and other investors are represented by East Coast Telecoms.

Wananchi Group’s a********n underlines a nasty turn in the fight over the fate of the firm’s only profitable business line, Wananchi Business Services whose sale has been earmarked for sale anytime after June 2017.

At the heart of the fight for the business unit is an internal w*r within ATMT Fund I pitting the consortium of the investors and co-shareholder and fund manager Richard Bell and his firm East Africa Capital Partners (EACP).

US government owned Overseas Private Investment Corporation (OPIC), the majority shareholder in ATMT Fund I, last month invoked its shareholder rights and kicked out Bell and EACP from the management of the firm to protect its value of the fund from erosion.

In their own suit seeking to overturn a c*********r barring them from challenging the sale of the business in any Kenyan court, the Kenyan investors have accused Bell and EACP for allowing a Sh3 billion t***t in the fund.

NEXT READ: Research reveals how poor you will be when yo retire

Before OPIC decision to kick them out, EACP was the promoter and manager of ATMT Fund I which indirectly owns 69.99% in Wananchi Group. “This t***t occurred as a result of poor management and the plaintiffs (Kenyan investors) s*****t EACP and Bell were indirectly or directly involved,” the investors tell the court in the case filed in April 18, 2017.

The high stakes w*r fought in Nairobi, Mauritius and London is being shepherded by Kenya’s biggest and award winning law firms.

Growth hits a plateau 

Coulson Harney is representing Wananchi Group while the Mucheru and co have three law firms, Hamilton Harris & Mathews, Archer & Winrock Advocates as well as Okoth & Kiplagat, handling the various aspects of the fight.

Bell and his firm, EACP, are represented by three law firms, Oraro and Company, Uteem Chambers and Stephenson Harwood in Nairobi, Mauritius and London respectively.

Wananchi Group Satellite CEO, Jay Chudasama explains to customers how the PayGo Solar TV works during the launch of the set in Embu County recently. The company is at the centre of a fierce shareholder fight.

So why is the fight centred on the business service unit of the firm?

The business service unit which is a conglomeration of six companies offering data connectivity to corporate clients and homes through fibre and satellite with over 700,000 corporate and home connectivity customers. But, the thinking in the company’s board is that the business service unit has reached its growth pinnacle thus the decision to sell it.

Wananchi Groups says it wants to sell the business unit in order to pay debt and capitalise it’s other business which include pay television channel Zuku TV.

“Sale of the business unit valued at US$35 million (Sh3.6 billion) will raise between US$15-20 million (Sh1.54-2.06 billion) after adjustments for debt and taxes for capital for other companies in the group that are fast growing and more profitable,” says Wananchi in the court document.

The Kenyan investors own an 8.2 percent stake in Mauritius domiciled ATMT Fund I that owns 69.99% indirect shareholding in Wananchi Group through ATMT Wananchi Group. Essentially, this means that the Kenyans investors do not have a direct stake in Wananchi Group since their shares are consolidated in ATMT Fund I with stakes of other investors such as OPIC and EACP.

NEXT READ: Gloria Muliro’s dirty business side

A look at the group shareholding structure shows that the Kenyans indirect stake is 3.16% of the total shareholding of the company, a fact that the firm has lurched on to make its case in court. “Any perceived interest if at all is so remote and subsidiary to other shareholders who have a direct interest in the dealings of Wananchi Group,” says the firm in its filing.

However, since December last year, the Kenyans investors have been seeking to stop the sale of business services unit to allow them time for their grievances within ATMT Fund I to be addressed.

In their c********e the Kenyan investors say their quarrel is not with Wananchi Group but with the how their investment vehicle, ATMT Fund is managed. Among the grievances they have listed in court against EACP which is the manager of the fund and Bell who is EACP Chief executive is that they have been oppressed by the majority shareholder in the fund.

The investors also accuse Bell of going behind their back to place a bid to buy the Wananchi Business Unit when he was supposed to have stopped it to protect their interests.

“While Wananchi Business is profitable and a number of investors are opposed to its sale, EACP has not done anthing to stop the sale but instead submitted a bid for its purchase as part of a consortium,” say the investors in affidavit sworn by Joe Kamau.

In an arbitration motion filed in London which the Kenyan investors have produced in court as evidence, Bell confirms that his company was part of a consortium that that placed and eventually won the bid to buy Wananchi Business Services.

SEE: CS Mucheru stuck with outlawed bitcoins wealth

The Kenyans also say the fund has not made any returns although it has been received several extension.

In the meantime, Wananchi is proceeding with the sale of the business. On 16th May, 2017, Wananchi Group announced that it had entered into an agreement to sell Wananchi Business Services which court documents show is valued at Sh3.5 billion to Synergy Communication (SynCom).

Synergy Communication is owned by Convergence Partners which placed the bid for the business in a consortium with Bell’s firm EACP. The transaction is now awaiting the approval from the Competition Authority of Kenya. (Copyright: MoneyandMoney)

[crp]

LEAVE A REPLY

Please enter your comment!
Please enter your name here