CMA opens inquiry into Munga’s Britam shares transaction

The Capital Markets Authority (CMA) has launched an inquiry into billionaire businessman Peter Munga’s Sh7.1 billion purchase of 452.5 million shares of Britam Holdings from the government of Mauritius.

The markets regulator has met Britam officials for talks to review details of the deal that left the island nation with a Sh3.9 billion loss.

The meeting ended without clearing Britam. The regulator has scheduled a second one and instructed the insurance firm to bring in more documentary evidence.

An inquiry set up in Mauritius revealed that the then Financial Services, Good Governance and Institutional Reforms minister Roshi Bhadain helped the Kenyan businessman buy the shares for Sh7.1 billion in 2016.

This was despite the fact that there were rival higher bids of Sh11 billion each from South Africa's insurance firm MMI Holdings and Barclays Bank (now Absa Group), which Mr Munga had earlier promised to match.

“CMA has called for some information and after a scheduled meeting the regulator has called for more information to be provided before the board is summoned,” a source familiar with the matter told the Business Daily.

“Part of the information being sought is details of the transaction, agreements and the profits made from the deal.”

Mr Munga later sold the 452.5 million shares in two transactions between 2017 and 2018 at prices that were not disclosed to the market.

The source said the CMA may not intervene in the instance when Mr Munga pocketed Sh135.7 million worth of dividends, which were due to Mauritius given that the parties agreed to the transfer of the dividend rights in the contract.

The regulator responded to the Business Daily’s request for comments, confirming the inquiry.

“The authority is reviewing the allegations and will respond appropriately,” said the CMA in an emailed response.

The controversial deal has raised eyebrows having been endorsed by former Treasury Cabinet secretary Henry Rotich, who wrote to Mauritius’ Ministry of Finance and Economic Development asking the shares to be sold to Kenyan investors.

The deal was denominated in Kenya shillings, making it difficult to establish whether kickbacks were also remitted to other parties and Mr Munga chose the paying bank, Equity Bank, which he helped found besides negotiating the currency conversion rates.

The Port Louis commission of inquiry said Kenyan officials did not cooperate with the investigations either snubbing the Mauritius officials while some individuals only submitted brief written statements which the commission variously described as misleading, coached or ridiculous.