When consumer goods maker Bidco Oil’s chief executive Vimal Shah heard that he had been listed as Kenya’s richest man and the country’s only dollar billionaire, his reaction was sharp.
“That is completely useless information. There is not a grain of truth in it and it is not worth a single penny from anyone,” he said.
“People are so desperate for money that they just package a string of falsehoods for purposes of selling it to others,” Mr Shah said of the report, available for sale at $2,000 (Sh176,000).
London-based research firm New World Wealth had in a report published early this week ranked Mr Shah as Kenya’s wealthiest man with $1.7 billion (Sh144 billion) to his name.
Mr Shah says most attempts to track, value and rank Kenya’s wealthy are a sham — based on illogical calculations and phony formulas.
“I can assure you that these guys, whoever they are, have broken no new ground. All they have done is to repeat the falsehoods that Forbes Africa magazine published last year,” he said.
To arrive at the conclusion that Mr Shah was worth $1.6 billion, all that Forbes Africa did was to take Unilever Nigeria, a consumer goods manufacturer with $340 million turnover and a market capitalisation of $1.4 billion and compare it to Bidco — a $500 million (Sh43 billion) turnover company.
Forbes Africa then concluded that were Bidco a publicly quoted firm, its market capitalisation would be at least $1.6 billion leading to the conclusion that Mr Shah was Kenya’s richest man.
The industrialist is convinced that all New World Wealth did was to slightly adjust Forbes Africa’s figure upwards to account for the one year that has passed since the ranking.
Mr Shah’s reaction to the wealth report forms part of an ongoing debate as to whether any ranking of rich in Kenya — a country where the rich go to great lengths to hide their wealth supported by a porous legal and regulatory environment — has any value to it.
Queries such as what type of riches are included in the surveys, whether or not attempts are made to ascertain joint ownerships or even whether the information is cross-checked with the subjects form part of the debate.
Bidco, for instance, is a family business run by father and two sons but all rankings have allocated the wealth to Shah.
The uneven landscape with its many dark corners have exposed many Kenyans to the possibility of being erroneously included or left out of the in the wealth list. The many dark holes have left in its wake a bizarre outcome where different rankings have produced different results even for similar periods.
Last year, for instance, Nigeria-based Ventures Africa magazine, released a wealth report that ranked industrialist Manu Chandaria as Kenya’s wealthiest man with a portfolio of $1.65 billion (Sh142 billion) — the same period that Forbes Africa ranked Shah as the country’s richest man.
Forbes Africa magazine says it calculates the net worth of an individual mainly using stock prices and the prevailing exchange rate at a certain dates.
“To value privately held businesses we couple estimates of revenues or profits with prevailing price-to-sales or price-to-earnings ratios for similar public companies,” said Forbes Africa when releasing the last poll.
While the three sets of reports employ a similar methodology, each has different thresholds especially relating to property they think was amassed through political ties or even corruptly.
Forbes Africa, for instance, excludes individuals when it cannot ascertain the “principal custodian” of their investments.
This rule saw them drop business magnate Manu Chandaria and the Kenyatta family from its 2012 and subsequent surveys despite having ranked them in 2011.
The publication explained that it only includes the wealth of family members “if it can be traced to one living individual; in that case, you’ll see “& family” on our list.”
But this did not stop Ventures Africa from declaring Mr Chandaria as Kenya’s wealthiest man (and 25th in Africa) with an estate worth $1.65 billion (Sh142 billion).
President Uhuru Kenyatta’s mother, Mama Ngina Kenyatta, came second in the list with $1 billion (Sh86 billion) spread in real estate, banking and hospitality sectors attached to her name.
That also put her in the exclusive list of the three women that made it to Africa’s billionaire club.
Though it named the Kenyatta family as one of Kenya’s richest political dynasties, the New World Wealth report did not value its wealth.
The report says “most of the Kenyatta family holdings are private (real estate, holding companies) making it difficult to value.”
Ventures Africa’s list of the super-rich also included former cabinet minister Nicholas Biwott and businessman Naushad Merali valuing them at $1 billion each.
Forbes Africa did not list Mr Biwott and valued Mr Merali at a much lower figure of $430 million (Sh37 billion).
The duo, who made their money during the era of President Moi, are listed in the New World Wealth report as centimillionaires – or individuals with a networth of between $100 million and $1 billion.
Variations in the way researchers assess the rich could be the reason some well-known Kenyan billionaires are perennially missing from these lists.
Notable families or individuals who are known to control multi-billion shilling estates include the Ndegwa family which has, through their investment firm First Chartered Securities, climbed the wealth ladder to become one of the richest in Kenya.
The investment firm has closed a number of deals, including acquisition of a majority stake in ICEA Lion Group, which owns ICEA and Lion of Kenya insurance companies.
The family of Philip Ndegwa, a former CBK governor, also had interests in catering firm NAS, in which a French multinational, Servair, acquired a majority stake in 2011 in a deal worth more than Sh2.2 billion -- buying out the Ndegwas and other local shareholders.
Victus Ltd, a company associated with the family, owns 38.5 million shares or 50.93 per cent in Unga Limited and has vast interests in real estate sector.
The family also has a 24.9 per cent stake in NIC Bank (worth over Sh7 billion but has never made it to the list of the super-rich.
Keen followers of Kenya’s wealth landscape have also been surprised at the perennial absence of the former spymaster James Kanyotu from the club of the rich.
Mr Kanyotu passed away in 2008 having built an empire with interests in banking, mining, insurance, real estate, aviation and large-scale farming.
While the New World Wealth mentions the families of President Moi, Mr Joshua Kulei and Njenga Karume as the “wealthiest political families,” it has failed to catch the likes of Kanyotu.
It has also surprised observers that former minister Njenga Karume or his estate which includes luxury hospitality facilities such as the Indian Ocean Beach Resort and Lake Elementaita Lodge, real estate and shareholding in some of Kenya’s big corporations has never made it to any list of Kenya’s super-rich.
Investment managers say the ability to hide wealth in vehicles such as nominee accounts, shell companies and the very weak disclosure rules make it very difficult to truly ascertain the worth of Kenya’s wealthy.
Most use proxies to own large stakes in listed companies land and commercial buildings in key towns across the country.
Besides, a high proportion of Kenya’s rich have stashed their wealth abroad in usually in tax havens like Switzerland, Singapore, Luxembourg and the Cayman Islands.
“New World Wealth research shows that a large proportion of local wealth is currently held offshore in 2013, Kenya high net worth individuals held 30 per cent ($10 billion),” the report noted.