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How Kenyan Investors Lost Billions At Stanlib Acquisition By ICEA Lion

[PHOTO/ COURTESY]

Kenyans who invested at Stanlib’s  Real Estate Investment Trust (Reit) in 2015 are now staring at a loss in billions, after the institution lost value and is now being sold out.

Reit, during its launch, promised investors a share of the real estate billions with a share trading at Ksh20, open even to the low class who couldn’t afford to invest in real estate.

Five years down the line investors, both individual and institutions, are regreting investing in the money market fund.

Read: CMA Chairman James Ndegwa Accused of Conflict of Interest in Market Regulation

Reports indicate that Stanlib Kenya is now finalising a transaction to sell off parts of its business including the Fahari iReit to ICEA Lion in a deal scheduled for completion on February 29, 2020, pending regulatory approvals.

By close of last week, Fahari iReit shares were retailing at Ksh9.60 per unit at the NSE, meaning shareholders will be losing more than Ksh1.6 billion on paper value of their original investment.

One of the biggest losers will be World Bank’s private sector arm – the International Finance Corporation (IFC) – that sunk in Ksh678 million.

Read: Okiya Omtatah Files Petition To Have CMA Board Disbanded

The acquisition is being orchestrated by Capital Markets Authority (CMA) chairman Mr James Ndegwa, who owns shares at ICEA Lion.

Ndegwa is the Chairman of First Chartered Securities (FCS). FCS owns ICEA Lion, which owns ICEA Lion Asset Managers, which manages the ICEA Money Market Fund.

The acquisition is thought to be one of the ways Mr Ndegwa is planning to stifle competition at the Money Market Fund sector, which he regulates as well as being a player.

FCS and it’s afflictions own a 12 percent stake in NCBA, which is listed in the Nairobi Securities Exchange. Hence, NCBA is also regulated by CMA.

Read: How James Ndegwa Has Been Cartelling Money Markets Through CMA

NCBA also runs NCBA money market fund, which is also regulated by CMA under Ndegwa.

Whether CMA orchestrated the fall of Reit to make acquisition easy for ICEA Lion or not is still unclear.

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Francis Muli

Written by Francis Muli

Senior reporter at Kahawa Tungu, Muli has a passion for human interest stories. He believes in unearthing societal rots that have been hidden from the public eye. He has also carved himself a niche in writing business stories. He has worked for various organisations including Kenya Television Service, Business Today among others. Follow him on Twitter @FmuliKE.
Email: [email protected]

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