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YEAR ENDER: Transition at NSE as rich founders loosen control

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Former ARM Pradeep Paunrana. FILE PHOTO | NMG 

Key founders in various Nairobi-Securities Exchange (NSE)-listed #ticker:NSE firms loosened their board and management control this year, ending decades of stewardship that shaped growth of their companies.

The board of Equity Group Holdings #ticker:EQTY announced the retirement of its founder and chairman Peter Kahara Munga.

Mr Munga, who celebrated his 75th birthday in June, marked an end to 35 years of service in an organisation he helped grow from a rural building society operating in Murang’a.

He took his successor, David Ansell, on a tour of the lender’s first branch opened in Murang’a in 1984 with only Sh5,000 and five staff.

Mr Munga cut his stake to 0.4 percent last year from 3.2 percent during the lender’s listing at the Nairobi bourse in August 2006.

“It is wise to own 10 percent of an elephant than 90 percent of a goat,” he once wittily remarked referring to his decision to cut his stake and allow the group to grow through other shareholders.

The year also saw Maina Wanjigi, former Cabinet Minister and the father of flamboyant businessman Jimmy Wanjigi, bow out of Carbacid Investment’s board. This brought to an end 48 years of service as a director.

Maina Wanjigi

Maina Wanjigi. FILE PHOTO | NMG

He also cut his stake to 3.8 million shares worth about Sh42 million from the peak of 12 million (Sh130 million) in 2015, based on Carbacid’s current share price of Sh10.9 a piece.

“The directors are extremely grateful to Hon Wanjigi for his significant contribution and wise guidance to the Carbacid Group over the many years that he served on the board and wish him good health and great success in future,” the board said.

He had also served listed firms such as Unga Limited #ticker:UNG, East African Cables and East African Breweries #ticker:EABL in various positions.

Veteran investment banker Jimnah Mbaru also retired as a director of the Nairobi NSE Ltd in June, bringing to an end one of the most defining tenures in Kenya’s financial services sector.

He bowed out after turning 70, the age in which a director of a listed company must legally retire unless he requests and is granted exemption by the Capital Markets Authority.

Mr Mbaru was first elected vice-chair of the NSE, then called Nairobi Stock Exchange, in 1991 and got re-elected the following year.

Equity founder Peter Kahara Munga. FILE PHOTO |

Equity founder Peter Kahara Munga. FILE PHOTO | NMG

During his tenure, he oversaw several developments at the stock market, including change from open outcry system to automated trading and demutualisation of share certificates.

The billionaire investor however remains the chairman of Dyer & Blair Investment Bank, which he acquired from KCB #ticker:KCB in 1983.

Troubled Athi River Mining Cement #ticker:ARM, which sank into administration due to debt, also rang changes bringing to an end the reign of owner and CEO Pradeep Paunrana.

Before ARM was placed under administration, Mr Paunrana had lost his CEO position even as he explained that the company was transitioning from family-owned and managed, to institutional investor representation.

Wilfred Murungi also parted ways with the struggling cement maker ending his 24-years stint as a director.

“I have seen the Company experience tremendous growth from a small plant producing 200 tonnes of cement per day, to the giant enterprise it is today producing 8,000 tomes of cement per day,” he summed up his tenure.

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