Asset financing firm M-Kopa Kenya Limited now alleges that its co-founder and former chief financial officer (CFO) Chad Larson intends to undermine the company’s progress as he takes his shareholding dispute to the Capital Markets Authority (CMA).
The Kenyan unit of the London-based M-Kopa Holdings said the legal actions initiated by Mr Larson, including the latest petition to the CMA, are not about defending African employees, but rather to disrupt the company’s success.
This follows Mr Larson’s social media post of a letter he had written to CMA’s chief executive officer Wycliffe Shammiah, asking the authority to review M-Kopa’s share pricing as Japan’s Sumitomo Corporation seeks to buy out existing shareholders.
Mr Larson owns a one percent stake in M-Kopa and served as its first CFO until 2018. The firm says Mr Larson left after losing confidence in the company and has since “worked against M-Kopa as a board director and paid adviser for a direct competitor.”
Another co-founder, Nick Hughes, has also left the company to start a new venture. Of the three co-founders, only Jesse Moore remains.
M-Kopa turned a net profit of Sh1.2 billion for the first-time last year, after more than a decade of losses.
In a statement, M-Kopa called Mr Larson’s allegations as “baseless” and argued that his interventions often coincided with critical business periods. The company claims that this pattern suggests coordinated attempts to hinder its progress rather than real grievances or genuine concern for its Kenyan employees.
“Mr Larson is also repeating his baseless allegations in the media, including by sending a letter to the CMA and leaking a copy publicly. The company strongly denies the baseless claims made by Mr Larson in court and in the media more broadly,” M-Kopa said.
In his letter to the CMA dated November 6, Mr Larson claimed that the valuation used to determine the buyback price for Kenyan employees “appears biased, manipulated and grossly inconsistent with the company’s actual market position and recent financial performance.”
He told the regulator that “the offer being presented to these employees is unreasonably low and not reflective of the fair value of M-Kopa,” alleging that it is about 95 percent below the level he believes is fair.
The claims relate to the ongoing Series F funding round that M-Kopa is discussing with Sumitomo Corporation, a Japanese trading firm seeking to increase its stake following a capital injection of Sh4.7 billion in 2023.
CMA told Business Daily that the matter is not within its purview as the company is not listed in Kenya.
According to Mr Larson, M-Kopa should be valued at between $4 billion (Sh518 billion) and $10 billion (Sh1.3 trillion), which would make it more valuable than Safaricom, Kenya’s largest listed company.
“His claims that M-Kopa should be valued at four to 10 billion dollars are demonstrably false. Ten billion dollars would equal the combined value of Kenya's two largest publicly traded companies,” M-Kopa said.
Mr Larson had previously gone to court seeking an injunction on the funding round on similar grounds. M-Kopa claims that he withdrew the case due to “inaccuracies in his sworn evidence.”
He was also unable to convince the court that his case was not related to a separate lawsuit filed by former M-Kopa employee Elizabeth Njoki, who alleges racial bias in the shareholding scheme for Kenyan staff.
Ms Njoki is suing M-Kopa over what she describes as a racially biased employee shareholding scheme that has been restructured to give employees of African descent lower-valued shares. She claims that their portion has been diluted from 27 percent in 2019 to seven percent today.
M-Kopa had previously requested that the Employment and Labour Relations Court dismiss the case on the grounds that shareholder agreements must be heard in UK courts since the company is incorporated in England.
In response to Mr Larson’s approach to the CMA, the company now claims that the regulator also lacks jurisdiction. “The transaction referred to in the letter relates to private share sales in a UK company between willing third-party buyers and sellers that do not fall under Kenyan CMA regulation,” M-Kopa said.
