South African financial services firm Liberty Holdings has disclosed that it pushed through changes in the top management of Stanlib Kenya last year after its investments were tied up in collapsed banks.
Liberty Holdings (SA) chief executive officer Thabo Dloti was quoted in South African media saying that the parent firm made changes at Stanlib following “operational issues in that business relating to impaired bank exposures.”
“Client money was invested in instruments that were exposed to second-tier banks in Kenya, which subsequently became illiquid. We’ve taken steps to make sure our business and clients are on a good footing,” Mr Dloti was quoted as saying.
Stanlib made changes in top management last year with former SBG Securities chief executive officer Nkoregamba Mwebesa taking over as managing director in December, in place of James Muratha who left in August.
Both SBG Securities and Stanlib fall in the stable of financial firms under the umbrella of Standard Bank of South Africa. Others in Kenya are Stanbic Bank, Liberty Life and Heritage Insurance.
Mr Dloti, however, declined to divulge additional details on the circumstances under which the money was invested, or name the particular banks, saying the matter was still under investigation.
Liberty Holdings had not responded to the Business Daily queries on the matter at the time of going to press Monday.
Mr Mwebesa also declined to disclose further details on the issue, saying that Stanlib would issue a statement later.
“We will have a press briefing for this,” he said.
Three lenders have been placed under receivership since 2015— Chase Bank (which has since reopened), Imperial Bank that is still under KDIC management and Dubai Bank, the first lender to be put under statutory management under central bank governor Patrick Njoroge’s administration.
Dubai Bank is currently under liquidation.
Stanlib announced Mr Muratha’s departure in August, with chief operations officer Joel Roimen taking temporary charge.
In August, the firm also announced the appointment of Humphrey Gathungu as its regional chief investment officer.
In a statement made at the time, Stanlib said that Mr Muratha had left to pursue personal interests.
During Mr Muratha’s tenure, Stanlib issued the first real estate investment trust (I-Reit) in Kenya, the Fahari Investment Reit, which is listed on the NSE. It was meant to raise capital for real estate investments.
The Fahari I-Reit entered the market at Sh20 in December 2015, but is now trading at Sh12.80, a 36 per cent loss in valuation.
The Reit raised Sh3.6 billion for the firm upon sale in October and November 2015 against a target of Sh12.5 billion, attributed by analysts to competition from other instruments in the market and a poor grasp of the concept of Reits by investors.