The late Billionaire businessman Naushad Merali. [Courtesy] Naushad Merali, the billionaire businessman who died last July, wanted to have his cake and eat it too. And he succeeded.
But in the process, Merali ended up eating the homework in the sale of Spire Bank, formerly known as Equatorial Commercial Bank (ECB), to Mwalimu Sacco, the eight-million-member-strong cooperative for the country’s teaching fraternity.
The businessman, who once quipped that he started doing buyouts long before the word “buyout” became fashionable, died having imprinted his name in diverse sectors – from telecommunications, manufacturing, agriculture and banking to real estate.
The story of how he pulled a fast one on the country’s teaching fraternity began on October 10, 2014 when he met officials of Mwalimu National Sacco and struck a deal to sell them a 51 per cent stake in ECB.
For a man who was not new to selling stakes, having profitably divested from firms such as Swift Global, Kenya Data Networks and Airtel Kenya (formerly KenCell), the teachers weren’t going to teach him anything new.
Seated on the other side of the negotiation table were teachers — masters at running a Sacco, but rookies in the banking business.
The teachers did not know what they were getting themselves into by agreeing to the deal, and after seven years of running the loss-making entity, they now want out of Spire Bank.
Their aspirations in Spire Bank have expired, strangled by the very man who sold them the bank. Mwalimu Sacco is looking to sell or liquidate the bank by March this year.
“There are times to make tough decisions. We cannot cry forever. We have to face the reality,” Kenneth Odhiambo, the acting CEO at Mwalimu Sacco, told Financial Standard in a recent interview.
“Words like ‘turnaround’ or ‘giving new lease of life’ are not in our vocabulary. We want to refocus our energy on running the Sacco business.”
And teachers have now vowed that they are not putting in even a single shilling to prop up the bank that has been on a loss-making streak for close to a decade now.“If for instance, you invested about Sh500,000 five years ago, and it has not brought in any returns, then you need to think twice,” said Mr Odhiambo. Naushad Merali met officials of Mwalimu National Sacco in 2014 and struck a deal to sell them a 51 per cent stake in ECB. [Courtesy] For Mwalimu Sacco, that investment was over Sh2.7 […]