The sale of the shares of the former BAI Group in Britam Holdings Ltd (Kenya) was done unconventionally. This is the conclusion of the Commission of Enquiry that was set up in 2017 to investigate the circumstances that led to the sale of the 23.3% shares owned by the BAI; evaluated at Rs 4.3 billion in 2015 but sold for Rs. 2.4 billion in 2016.
According to the Commission, there was a lack of openness and transparency in the procedure, there were no independence and impartiality in the evaluation of the assets; no involvement of investment advisers, no legal advisers and no skilled negotiators involved. Cabinet, the Financial Services Commission as well as the National Property Fund Ltd, the lawful owner of the shares, were all kept in the dark.
According to the report, the ex-Minister of Financial Services and Good Governance, Roshi Bhadain, took the lead in negotiations and decided almost singlehandedly to sell the shares at the price proposed by the Kenyan business tycoon, Peter Munga, at Rs. 2.4 billion.
The Commission concludes that the shortfall of Rs 1.9 billion was due to the lack of proper methodology and evaluation, the absence of proper negotiation and the non-existence of a transaction adviser and legal oversight.
RECOMMENDATION FOR CRIMINAL AND CIVIL LIABILITY UNDER TOR (VI) AND ANCILLARIES
Facts elicited in this enquiry reveal the possible commission of criminal offences by a certain number of persons. We, accordingly, recommend the following matters for criminal investigation by the relevant authorities. They also reveal that the persons involved may have incurred civil liability for the manner in which they conducted the sale, keeping Cabinet in the dark, engaging their personal responsibility as opposed to Cabinet responsibility.
Its conclusions are:
CRIMINAL INVESTIGATION FOR FORGERY AND/OR MAKING USE
Possible offences relating to forgery or making use of a forged document under the Criminal Code and/or giving false evidence in the proceedings before the Commission may have been committed. The persons, entities and companies involved specified hereunder in alphabetical order:
- Mr Bhadain Sudarshan;
- Mr Deerpalsing Akhileshwarnath;
- Mr Ebrahim Afsar;
- Mr Khapre Sandeep;
- BDO and
- such others as the progress of the inquiry will uncover.
The document concerned is the Minutes of Proceedings of the meeting held on 14 November 2015 in Nairobi.
SECTION 109 AND SECTION 125 OF THE INSOLVENCY ACT
Possible offenses relating to breach of Section 109 and Section 215 of the Insolvency Act may have been committed by the persons hereunder specified.
They are in alphabetical order:
- Mr Afsar Ebrahim;
- Mr Yacoob Ramtoola; and
- BDO
This relates to a prohibition by law to take up professional assignment in conflict of interest and/or giving false information to the Commission regarding the dates of professional engagements and/or giving false evidence in proceedings before the Commission.
