An inquiry has found that Peter Munga pocketed Ksh135.7 million worth of dividends in 2016 for Britam shares that he did not own.
According to reports by Business Daily, Munga signed a secret deal with top officials of Mauritius government giving up the rights to earn dividends on the shares before he acquired the shares.
Munga’s firm, Plum LLP signed an agreement to buy 452.5 million Britam shares from the government of Mauritius on June 10, 2016, a day after the book closure date.
Under normal circumstances, the dividend, which was paid on June 24, 2016, would have gone to the government of Mauritius but was instead paid to Munga.
The Britam shares were seized from Dawood Rawat, a Mauritius national whose Ksh71 billion Ponzi scheme was exposed in 2015. They were managed by a special vehicle created by the government, the National Property Fund Limited (NPFL).
Munga bought the shares for Ksh7.1 billion, despite there being offers of Ksh11 billion each from South Africa’s MMI Holdings and Barclays Bank (now Absa Group).
“The commissioner therefore considers that NPFL had been unfairly deprived of an amount of approximately R43 million (Ksh135.7 million) representing dividend calculated on the basis of Ksh0.30 yield per share for the year ending 2015 in view of the fact that the completion date referred to at clause 6.2 of the special purchase agreement is well after the June 10, 2015,” noted the inquiry report.
Munga is said to have been given so lenient terms in the purchase, raising suspicion on whether legal procedures were properly adhered to.
“This is not usual or good practice. The commission notes with utmost concern that such clauses do not seem to have been questioned by the NPFL or even the special administrator. It is also not clear whether this special purchase agreement (SPA) had been duly vetted by the legal advisers of the NPFL,” adds the report.
The purchase of the shares led to a loss of Ksh3.9 billion on the Mauritius government.