Britam seeks to clip veto powers of fugitive Rawat

Insurance group Britam is set to delete from its articles of association veto powers that were held by its single-largest shareholder Dawood Rawat, a fugitive Mauritian who is wanted by his government for allegedly perpetrating a $693 million (Sh67.2 billion) Ponzi scheme in the island nation.

Mr Rawat, through his investment vehicle British-American (Kenya) Holdings Limited (BAKHL) currently has the power to veto the appointment of Britam’s CEO and finance director.

This power would be inherited by the Mauritian government, which now controls his empire.

The Nairobi Securities Exchange-listed firm, however, plans to remove these powers from the run-away businessman's stake at its upcoming annual general meeting in Nairobi on June 26.

Part of Britam’s special business at the AGM will be the deletion of Article 104 which partly reads: “Provided always that any resolution relating to the following matters shall not be deemed to have been passed if any director appointed by BAKHL… or his alternate votes against it: (a) the appointment of the managing director/chief executive officer or (b) the appointment of the financial director/chief financial officer.”

The proposal comes at a time when the Mauritian government is completing the take over the investment vehicle.

The businessman is accused of running a Sh67.2 billion Ponzi scheme at British American Insurance Co (Mauritius), which had a knock on effect on Bramer Banking Corporation (BBCL) and other Rawat holdings.

READ: Ponzi scheme fells Mauritius bank tied to Britam director

He is said to be undergoing treatment in Europe and recently resigned as a director of Britam alongside his nephew Moussa Rawat.

Asset seizures

A Ponzi scheme is a scam where investors are promised or paid unrealistic returns from cash paid in by new members, necessitating an endless recruitment drive that eventually proves unsustainable.

The asset seizures by the Mauritian government are meant to safeguard the interests of BBCL depositors and policyholders in its sister company BAI Co (Mauritius), which is currently managed by conservators appointed by the State.

The global asset hunt has unearthed a castle near Italy’s capital, Rome, and property in places like the United Kingdom, Croatia and Romania.

Mr Rawat’s stake in Britam, currently with a market value of about Sh10 billion, has been identified as one of the most valuable assets.

The Mauritian government is expected to eventually sell BAKHL’s interest in Britam.

If passed, the resolutions will give Britam’s board a freer hand in appointing individuals to the two positions in the future.

Britam’s current CEO is Benson Wairegi while the CFO is Gladys Karuri.

Britam will, however, propose at the AGM that BAKHL will have the right to appoint two directors based on its current holding of a 23.34 per cent stake in the company.

The BAKHL directorships are derived from each complete 10 per cent equity and excludes future stock issuance.

Besides the voting powers and directorship allotments, Britam has also asked shareholders to approve the change of name from British-American Investments Company (Kenya) Limited to Britam Holdings Limited.

The company said its auditor PricewaterhouseCoopers (PwC) has rotated out and that it will ask shareholders to ratify the firm’s replacement with Deloitte & Touche.

Britam revised its books for 2014 a month after they were published, reducing its after tax profit by Sh342 million to Sh2.5 billion.