Real People ex-directors face CMA sanctions over Sh1.6 bn bond fraud

Real People former CEO Daniel Ohonde on August 26, 2014. 

Photo credit: File | Nation Media Group

Four ex-directors and a serving director of micro lender Real People Kenya Ltd (RPKL) now face sanctions from the Capital Markets Authority (CMA) after a tribunal rejected their bid to block a disciplinary hearing for their roles in the illegal diversion of the proceeds of a Sh1.6billion bond to South Africa about nine years ago.

The Capital Markets Tribunal dismissed an appeal by the four ex-directors— Norman Ambunya, Daniel Ohonde, Nthenya Mule, and Charl Kocks— who had sought to block CMA’s Ad Hoc committee from proceeding with the hearings on the matter.

Ms Yvonne Godo, who stills serves on the RPKL board, is part of those facing CMA sanctions over her roles in the scandal.

The tribunal in a ruling delivered on June 5, 2024, dismissed the directors’ appeal and instructed CMA’s Ad Hoc Committee to continue with the proceedings.

“In the upshot, this tribunal by unanimous decision (Hon. G. Wang'ong'u having recused himself) finds that the appeal is without merit, and we make the following orders:(a) The appeal is hereby dismissed in its entirety, (b) the proceedings by the Ad Hoc Committee of the respondent shall proceed from where they had reached, (c) costs of the appeal be borne by the appellants (directors),” read the judgment.

CMA’s investigations in 2015 disclosed that the directors allegedly violated certain provisions of the Code of Corporate Governance Practices for issuers of securities to the public (2015) and the Capital Markets Act.

The regulator had fined four other former directors of Real People a combined Sh15 million for their roles in diverting proceeds of a Sh1.6 billion bond to South Africa.

The lender raised Sh1.6 billion in 2015 from Kenyan investors to issue loans to local customers but the bulk of the money was wired to its parent company in South Africa to pay an internal loan.

This landed nine former bosses and directors-four Kenyans and five South Africans, in trouble with the regulator who ordered an inquiry into the company.

Five of the nine executives opposed to the regulatory action and moved to the CMA tribunal, while the other four were fined between Sh2.5 million and Sh5 million.

The Kenyan unit of Real People is fully owned by South Africa firm-Real People Investment Holdings Limited (RPIHL).

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