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KenGen boss Mugo increases stake four-fold to Sh12.78m

Mr Albert Mugo, KenGen managing director. PHOTO | FILE
Mr Albert Mugo, KenGen managing director. PHOTO | FILE 

The Kenya Electricity Generating Company managing director Albert Mugo has increased four-fold his stake in the company within the past one year.

Mr Mugo’s current shareholding in KenGen stood at 2.2 million shares or 0.035 per cent of the company as at June 2016, up from 184,831 shares (0.0084 per cent) in June 2015.

He said the purchase of additional stock shows his mark of confidence and bullish outlook for KenGen.

The KenGen boss increased his portfolio to 615,831 shares as at March 2016 ahead of the June cash call where he took up all his rights and even bought more shares.

“I have a lot of confidence in KenGen. I took my rights during the rights issue and even added more shares,” Mr Mugo said in an interview.

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Mr Mugo’s share purchases come despite a dividend crunch at KenGen after net profit nearly halved to Sh6.7 billion in the period to June 2016, attributed to the lack of a tax credit enjoyed the previous year, increase in the company’s finance costs and higher operating expenses.

His stake is now worth Sh12.78 million based on Wednesday’s closing price of Sh5.80 apiece. The counter is trading at 11 per cent below the Sh6.55 per share rights issue price.

More than a dozen corporate Kenya CEOs own shares in the companies they sit at the corner office, a trend that is gaining currency as a hedge against mismanagement and a tool to promote corporate governance.

The league of CEO-shareholders in companies they lead includes Bob Collymore (Safaricom), Frank Ireri (Housing Finance), Tom Gitogo (CIC Group), Benson Wairegi (Britam) and James Mwangi of Equity Bank.

Also on the list are Gideon Muriuki (Co-operative Bank), Pradeep Paunrana (ARM Cement), Muchiri Wahome (Deacons), Hector Diniz (Express Kenya), and Bharat Thakrar (WPP Scangroup).

At KenGen’s annual general meeting held last month, shareholders questioned why some directors didn’t own any shares in the power generator.

The shareholders linked KenGen’s failure to declare a dividend payout for the first time since it went public in 2006 to directors’ insensitivity as they don’t own a piece of the energy company.

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