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Italian who cheated Kenyans of Sh450m goes to Harare

Carl Esprey
Mr Carl Esprey. FILE PHOTO | NMG 

Carl James Esprey, the Italian whose earlier venture in Kenya Atlas African Industries disappeared with more than Sh450 million of investors’ money, is back in business with a new company seeking to export medical marijuana from African countries, including Zimbabwe and Lesotho.

Mr Esprey, who partnered with Kojo Annan (son of former UN secretary-general Kofi Annan) earlier this year to launch African Cannabis, is following the same script that left thousands of investors in Atlas out of pocket.

Details of his new venture are contained in filings with the Canadian capital market regulators, which show that African Cannabis also plans to go public by merging with Trius Investments Inc, a company listed on the Canadian Securities Exchange (CSE) and whose business comprises property investment and garbage collection.

Atlas raised Sh450.1 million in a private placement from Kenyan investors in 2014 when it listed on the Nairobi Securities Exchange (NSE) where it debuted with a market capitalisation of Sh4.9 billion.

Besides participating in the private placement, Kenyan investors also bought shares after the listing but suffered heavy losses when the stock price collapsed from the initial Sh11.5 to Sh1.05 by the time it was suspended from trading in May last year.

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No communication

After closing the Kenyan operations, Atlas tried its hands at diverse sectors and countries before literally disappearing with no communication to shareholders.

The company ventured into Ethiopia where it said some $2.4 million (Sh244 million) earmarked for building a glass bottle-making plant was illegally seized by Ethiopia’s tax authorities, forcing it to shut down.

It then invested Sh50 million to acquire a minority stake in BonanzaWin, a Nigerian gaming company, marking its last known activity in Africa.

Mr Esprey’s new venture, African Cannabis, is also raising Sh1.5 billion (20 million Canadian dollars) in a private placement in Canada, whose proceeds will be used to fund production and export of medical marijuana.

“African Cannabis is a Toronto-based company incorporated in British Columbia in 2018 to deal in the production, cultivation, extraction and export of medical cannabis in multiple African countries,” the company said in market disclosures.

“African Cannabis was founded and is led by Carl Esprey and Kojo Annan, both experienced African businesspeople with over 40 years’ combined experience on the continent,” it added, making no mention of the Atlas saga.

The 39-year-old Esprey, who is emerging as a controversial globe-trotting financier, had not responded to our emailed queries on his venture by the time of going to press. Calls to his Moroccan telephone number did not go through.

Mr Esprey’s choice of the cannabis business coincides with a wave of legalisation of marijuana around the world and a huge investor appetite for shares in companies producing the commodity.

Lucrative business

Canadian pot stocks such as Cronos Group, for instance, have rallied more than 100 per cent this year after the North American country legalised cannabis and industry players sought to find new uses for the drug such as beverages.

The reverse takeover of Trius Investments, in an all-stock deal, could see African Cannabis position itself to benefit from the trading frenzy in marijuana stocks.

Mr Esprey and Mr Annan will have control of the merged entity, according to the terms agreed by the two firms. In a testament to the Italian’s ability to extract incredibly favourable terms from counterparties, Trius has, ahead of completion of the merger, agreed to lend $250,000 (Sh19 million) to African Cannabis, which currently has no revenues.

African Cannabis says it is holding a medical cannabis licence in Lesotho and has entered into a joint venture with a Zimbabwean State-owned company in order to obtain a licence in that country.

Lesotho last year became the first African country to legalise cultivation of marijuana for medicinal purpose and it was followed by Zimbabwe earlier this year, with other countries said to be considering making similar moves.

“African Cannabis is in discussion with multiple other countries in Africa to develop the industry and ultimately produce medical cannabis at multiple sites across the African continent,” the company said.

Besides African Cannabis, Mr Esprey is also linked to other companies, including London-based realtor Mayfair UK (Properties) Limited which he recently joined as a director.

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