The Capital Markets Authority (CMA) has initiated discussions with Genghis Capital Limited to resolve unmet contractual obligations linked to outstanding debt owed to its stakeholders. This engagement forms part of CMA’s broader mandate to safeguard investor interests and uphold market integrity.
Genghis Capital is grappling with severe financial challenges as auctioneers move to liquidate its office assets to recover a debt of $2.74 million (approximately Sh354.55 million) owed to South African businessman Auswell Mashaba.
According to reports, the legal battle stems from a loan of $2,265,000 (Sh293.08 million) issued by Mashaba to Genghis Capital on January 25, 2017, with an interest rate of 7.25 percent. After failing to repay, Mashaba sought a judgment for $3,100,000 (Sh401.13 million) plus continued interest.
Moran Auctioneers, tasked with the recovery process, have already listed a range of office items for auction. The assets up for sale include 16 desktops, 13 metal cabinets, 17 wooden cabinets, a five-seater leather sofa, two television sets, a fridge, as well as multiple laptops, chairs, and desks. This comprehensive liquidation effort underscores the gravity of the firm’s financial predicament.
In a press statement, CMA emphasized that clients’ assets under Genghis Capital’s management remain secure. “CMA would like to clarify that clients’ assets are held in segregated accounts separate from the funds of Genghis Capital Limited,” CMA clarified. This assurance seeks to address growing concerns among stakeholders about the firm’s financial position while reinforcing investor confidence.
Genghis Capital, a prominent market intermediary in bonds, stocks, and unit trust fund management, operates under the stringent regulatory framework of the Capital Markets (Collective Investment Schemes) Regulations 2023. These regulations mandate the clear separation of roles between fund managers, custodians, and trustees to ensure robust investor protection.
“The operations of the Genghis Unit Trust Scheme are regulated under the Capital Markets (Collective Investment Schemes) Regulations 2023, which require clear separation of the roles of the fund manager from those of the custodian and trustee. Client assets managed under the Genghis Money Market Fund and Mali Money Market Fund are held by a duly authorized custodian and oversighted by an independent trustee.” CMA added
“We wish to reassure our esteemed clients of Genghis Capital’s unwavering commitment to safeguarding your investments and delivering exceptional service. We understand the concerns surrounding the stability of the company, and we want to emphasize that Genghis Capital remains financially strong and resilient.” said Edward Wachira, Chief Executive Officer of Genghis Capital, in a public statement.
As a fund manager for the Genghis Unit Trust Fund and Mali Money Market Fund, the company reiterated its commitment to transparency and fiduciary responsibility. “Trustees and independent licensed custodians securely manage all client funds, ensuring full protection of investments,” added Edward Wachira
In response to speculation surrounding its stability, Genghis Capital reassured clients of its financial resilience. The firm emphasized that its operations comply with the oversight of the Nairobi Securities Exchange (NSE) and the Central Depository and Settlement Corporation (CDSC), as well as CMA regulations.
“We continue to manage our business with diligence, maintaining stability and upholding our commitment to transparent, responsible service,” stated Wachira. The company underscored its focus on delivering exceptional service, protecting client investments, and ensuring seamless operational activities irrespective of internal challenges.
CMA engagement with Genghis Capital comes at a critical time when trust in financial intermediaries is paramount. The regulator’s proactive measures, including its insistence on segregated client accounts, aim to mitigate risks and uphold market stability.
The authority has pledged to closely monitor the firm’s roadmap for addressing the outstanding debt while ensuring compliance with regulatory requirements. This intervention is anticipated to boost investor confidence and maintain the integrity of Kenya’s capital markets.
As the Kenyan financial sector navigates evolving challenges, regulatory oversight and transparency remain central to fostering market trust. Genghis Capital’s proactive communication and CMA’s decisive intervention signal a collective commitment to safeguarding investments.
With investor protection being a cornerstone of its operations, CMA engagement with Genghis Capital is testament to its dedication to maintaining a secure and reliable investment environment. Meanwhile, Genghis Capital’s reaffirmation of its commitment to excellence in fund management offers hope for stability and growth within the sector.
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