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How Sameer Has Been Understating Its Properties To Dupe Shareholders

Naushad Merali. [PHOTO/ COURTESY]

Recently, businessman Naushad Merali acquired an additional 1.91 percent stake Sameer Africa to reach a new high of 74.06 percent.

The company recently dropped its tyre business in a bid to return to profitability by concentrating on its real estate arm.

However, in their income statement for 2019, the company valued their investment properties at Ksh450 million, while in real sense it is worth billions.

According to audited financial results of 2019, the company’s total current assets add up to Ksh867 million while the total cumulative assets (plus non-current assets) is Ksh1.53 billion.

This is was is in the public domain, but a deeper check showed that the company had more assets in terms of properties, which were not mentioned in the report.

According to an excerpt of a detailed report obtained by Kahawa Tungu, Sameer properties were valued at Ksh8.2 billion as at December 2019, a rise from Ksh7.8 billion in 2018.

Read: Sameer Africa External Auditor KPMG Resigns As Company is Accused of Dirty Deals With Gov’t

Business Daily reports that two companies associated with Mr Merali, Sameer Investments and Yana Trading, bought a total of 5.3 million shares of Sameer Africa with a current market value of Ksh18.6 million in the year ended December 2019.

In 2014, he acquired a 14.9 percent stake in the group’s tyre business, which pushed his shareholding to 72.15 percent.

This means that the businessman could be in a plot to acquire 100 percent stake in Sammeer Africa cheaply, since most investments are understated.

The group has stakes in stakes in Sameer Business Park (25 percent) and Sameer Industrial Park (100 percent).

The company projects that it could make a profit of Ksh185 million in the current financial year ending December, from a net loss of Ksh1.062 billion recorded in 2019.

The Group’s revenue reduced by 15 percent from Ksh2.07 billion in 2018 to Ksh1.76 billion in 2019 following the closure of several retail outlets in Kenya and the East African region.

The working capital of the firm is now on the negative at Ksh134 million.

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Written by Kahawa Tungu


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