Investors have suffered a paper loss estimated at Sh264.3 billion in eight Kenyan firms which have been on the spot over mismanagement and fraud, investment manager Cytonn has said.
These firms are Chase Bank, Imperial Bank, CMC, Uchumi, Mumias, Kenya Airways, National Bank and TransCentury.
According to Cytonn, 68 per cent or Sh179.5 billion of the wealth was lost in KQ alone, following massive erosion of its share price at the Nairobi Securities Exchange.
Another 13.62 per cent or Sh36 billion was lost in the collapsed Imperial Bank, a case where a former managing director is accused of masterminding an intricate fraud scheme before the lender was placed under receivership.
Indebted Mumias Sugar Company, contributed 10.21 per cent or 27 billion of the total loss while the investors lost Sh5.1 billion in the troubled Uchumi.
TransCentury, which is currently owing bondholders about Sh4 billion, has seen investors lose Sh8.7 billion.
The management crises that led to Chase Bank's collapse last month saw investors lose Sh4.8 billion. Chase Bank reopened on April 27 under the management of Kenya Commercial Bank.
The investors further lost Sh2 billion in National Bank and Sh1.2 billion in CMC.
“Poor strategies have led to the demise of companies like Mumias, Uchumi and Kenya Airways, with the capital in these entities shrinking by more than 90 per cent and the companies operating with negative equity positions,” chief investment officer Elizabeth Nkukuu said yesterday during the launch of Cytonn Corporate Governance Index.
The index shows Uchumi was in the top 10 list of poorly governed companies with a score of 37.5 per cent.
But National Bank, which has been on the spot recently for failing to adhere to timeliness in the release of company results, scored 68.8 per cent, placing it in the same league as Kenya Power and the NSE which garnered the same score.
Cytonn said the main areas of analysis were board composition, audit functions, the tenure of the chief executive officer and evaluation, remuneration and transparency.
The index shows Kenya Orchards is the most poorly governed company, having garnered a score of 10.4 per cent, followed by Limuru Tea and Flame Tree Group, which scored 18.8 and 33.3 per cent, respectively.
Other poor performers are Crown Paints, ScanGroup, Carbacid Investments and Williamson Tea which scored below 50 per cent.
The report cited Kenya Commercial Bank as the best governed company in the country followed by Safaricom and Standard Chartered.