The family of the late Nelson Muguku has further loosened its grip on Equity Bank after it transferred shares worth Sh230 million within the three months to June.
Filings with the regulator indicate that the family cut its shareholding from 4.3 per cent in October 2011 to 1.76 per cent in June, and 1.49 per cent in November after selling 10 million shares.
The Muguku stake is now being held by Leah Muguku and it is not clear whether the family sold the 91 million shares currently worth Sh2.09 billion since October or distributed the stocks among beneficiaries of the Equity stake that at one time was worth more than Sh5 billion.
The direct stake held by the Mugukus is now worth Sh1.31 billion — a drop that has seen the family relinquish the position of Equity’s largest individual shareholder.
Individual top shareholders of Equity Bank have since 2008 earned billions of shillings from the sale of their shares after the end of a two-year-lock-in period for this category of investors.
The anchor shareholders were barred from selling their shares for two years after its debut at the Nairobi Securities Exchange (NSE) in 2006 as a condition to listing.
“The sale of the shares by top shareholders is a case of profit-taking as the business moves to maturity,” said an analyst at Suntra Investment Bank in an earlier interview, adding that reduction of the Muguku stake could be a case of estate planning.
Mr Muguku, who died in October 2010 at the age of 78, built a multi-billion shilling business empire from poultry farming.
The Muguku family cut back its stock by 12.9 million shares within the nine months to September 2011, earning about Sh250 million and another 10 million shares worth Sh220 million in the three months to June.
In 2010, the family sold shares worth Sh1.2 billion and Equity said the sale was intended for purchase of Standard Chartered Bank former headquarters on Moi Avenue, which had been placed on auction after the bank found a new home in Westlands. The Business Daily could not confirm whether the deal went through.
The value of the family’s stake has risen from Sh522 million in 2006 to the current Sh1.31 billion.
Mr James Mwangi, the Equity Bank CEO, has earned about Sh1.6 billion over the past three years from share disposals that he said were dictated by regulations barring an executive director of a bank from holding more than five per cent of the institution’s capital.
His direct stake has dropped to 3.45 per cent from 5.49 per cent in 2008, but he has indirect interests through British American Investments and the bank’s Employee Share Ownership Plan amounting to 1.43 per cent.
Mr Mwangi’s direct stake is worth Sh3.03 billion, helped by the bank’s share price rally that has seen the stock gain 44.8 per cent over the past year to Sh23.75.
This has made him one of the wealthiest executives in Corporate Kenya, reaffirming the stock market’s position as the shortest route to fortune in an economy whose performance has oscillated between strong growth and rock bottom slowdown.
Since debut at the NSE on August 7, 2006, the share has appreciated by more than 900 per cent taking into account splits and bonus stocks.