America stocks market regulator has suspended a Canadian firm from trading in the United States for failing to shed light on disclosures indicating it signed a Sh139.5 billion (1.06 billion euros) loan agreement with Kenya.
The Securities Exchange Commission (SEC) Thursday said Kallo Inc remains suspended to April 7 to protect investor interest.
America stocks market regulator has suspended a Canadian firm from trading in the United States for failing to shed light on disclosures indicating it signed a Sh139.5 billion (1.06 billion euros) loan agreement with Kenya.
The Securities Exchange Commission (SEC) Thursday said Kallo Inc remains suspended to April 7 to protect investor interest.
“There is a lack of accurate information of questions regarding the accuracy of statements the company has made in filings with the commission, including a Form 10-K for the year ending December 31, 2020, filed on March 3, 2021,” SEC said in a statement on its website. “The commission has serious concerns, for example, about the accuracy of the company’s claim that it has entered into a contract with the Republic of Kenya to establish a comprehensive healthcare structure.”
The Business Daily last week reported the disclosures on the SEC website showing that Kallo Inc had in June last year signed a Sh139.5 billion (1.06 billion euros) loan deal with Kenya to build mobile clinics and upgrade hospitals in the counties at the height of the coronavirus crisis.
Firms are required to make filings with the powerful SEC if their securities are publicly traded in America, raised funds in the US or have shareholders required to file corporate actions with regulators in Washington.
“On June 26, 2020, the company finalised contracts with the Republic of Kenya and Techno-Investment Module Limited for a project contract and a finance contract,” the SEC filings of March 3 indicate.
“Under the terms of the agreement, Kenya is seeking to borrow the sum of 1,068,932,543 euros from TIM and the funds are to be used primarily to build phase one of a planned National Healthcare Infrastructure.”
The Treasury denied the existence of the loan deal. The loan, according to the SEC filings, is a 20-year facility charged at two percent plus Libor [London Interbank Offered Rate], which currently stands at negative 0.4 percent.
Kenya was given a three-year grace period freezing payment of part of the loan, whose payments, including principal and interest, were to be done quarterly from 2023. Techno-Investment Module Ltd was expected to pay the Sh139.5 billion loan directly to Kallo Inc once Kenya issued a guarantee technically called a standby letter of credit.
A standby letter of credit is a legal document that guarantees a bank’s commitment of payment to a supplier in the event that the buyer defaults on the agreement.
“The commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed company,” said SEC.
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