Home Afrika #ticker:HAFR has bought 40 acres of land in Isinya from its chairman, Linus Gitahi, in a transaction valued at tens of millions of shillings.
The transaction with Mr Gitahi, who joined the company’s board in April 2016, has been disclosed in the property developer’s latest annual report and resolutions of its annual general meeting last week which approved the deal.
The disclosures were made in line with provisions of the Companies Act which require shareholders to ratify substantial trades involving non-cash assets between a business and its directors.
“To consider and if found fit, to pass a special resolution approving a substantial property transaction between the company and a director, Mr Linus Gitahi in accordance with the provisions of Section 158 of the Companies Act 2015,” reads the report.
Home Afrika’s chief executive Dan Awendo told the Business Daily that Mr Gitahi is part of a group of individuals who sold the land to the company at prices he described as below market value.
“This deal came to us to help Home Afrika at a most dire time when we had no cash flows and no sellable inventory to help us get the cash flows we needed,” Mr Awendo said.
Mr Gitahi, who has previously served as chief executive of Nation Media Group #ticker:NMG, is among prominent businessmen backing the loss-making developer as directors and shareholders.
Chinese investor Zeyun Yang, the developer of the Great Wall apartments in Machakos County, last year became the single largest shareholder in the company after acquiring 13.2 million shares equivalent to a 3.2 percent stake.
Home Afrika’s latest annual report also shows that businessman Paul Ndung’u raised his ownership to a new high of 6.8 million shares, ranking him fourth with a stake of 1.69 percent.
The company says its market capitalisation on the NSE (Sh200 million or Sh0.5 per share), continues to discount the value of its land holdings, which it has not re-priced upwards to reflect what they can fetch in the market.
Home Afrika reported a net loss of Sh94.6 million in the half year ended June, narrowing it from Sh138.4 million a year earlier.