Billionaire investor John Kibunga Kimani has created a foundation he plans to use to hand over some Sh93 million worth of Kakuzi #ticker:KUKZ shares to squatters he grew up with around the agricultural firm.
Mr Kimani, who has risen from the farmhand he once was to become a major land owner and one of the biggest individual shareholders in Nairobi Securities Exchange-listed #ticker:NSE firms, said he had decided to allocate some 300,000 shares to the Kakuzi squatters.
“I want them (squatters) to benefit from my investment in Kakuzi. I will give 300,000 shares of Kakuzi to the foundation over five years,” Mr Kimani said.
The Kakuzi Neighbourhoods Development Foundation, a philanthropic vehicle, is being funded by his shares in the agricultural firm and any dividends accruing.
Mr Kimani has started buying Kakuzi stock for the foundation, which held 13,700 shares worth Sh4.2 million in August, according to regulatory filings seen by the Business Daily.
The fund’s charitable activities will be focused on improving sanitation and educating bright students from poor families around the firm, he said.
Mr Kimani said the foundation will finance the education of up to 20 high school students each year and on to university.
The foundation's shares, together with the businessman’s own direct investment, are expected to raise his interest in the company to a new high.
His stake has risen steadily from two per cent in 2005 to 31.19 per cent worth Sh1.9 billion currently and the businessman wants to further boost it to 39.9 per cent.
This means that Mr Kimani and UK multinational Camellia Plc, which has a controlling 50.7 per cent equity in Kakuzi, are on course to hold more than 90 per cent of the agricultural firm’s shares.
Kakuzi’s executives, appointed by Camellia, have already written to the Capital Markets Authority (CMA) protesting Mr Kimani’s purchases, arguing that they are reducing the company’s free float and causing illiquidity for small investors.
The regulator, however, tolerates such concentrated ownership structures among publicly traded firms. French oil giant Total S.A., for instance, owns 93.96 per cent of its local subsidiary Total Kenya.
Less than 15 per cent of BAT Kenya’s shares are in public hands, with its London-based parent company BAT Plc holding 60 per cent equity and the rest in the hands of various institutional investors.
While Camellia cited reduction of public shares in its letter, the multinational’s reaction is seen as being largely motivated by its discomfort with Mr Kimani, who has expressed solidarity with the squatters.
Kakuzi’s chairman, Graham Mclean, at the firm’s annual general meeting in May blocked a proposal from minority investors to have Mr Kimani appointed as a non-executive director on account of his large stake.
The businessman says his purchases are simply for passive investments and philanthropic goals.
“I want to make it clear that I am not fighting anybody in Kakuzi,” Mr Kimani said.
The funding planned for the Kakuzi foundation represents a small fraction of the businessman’s multi-billion shilling fortune.
Mr Kimani’s shares in NSE-listed firms have a market value of more than Sh3 billion.
A buy-and-hold investor, he has significant stakes in Safaricom, #ticker:SCOM Centum Investment, Nation Media Group, #ticker:NMG East African Breweries #ticker:EABL and Total Kenya #ticker:TOTL among others.
Court documents have also revealed the businessman to be major land owner, underlining the extent of his transformation from a Kakuzi squatter.