PUNISHMENT

Canadian firm in Kenyan loan claim suspended in US

Kenya protests to US Securities Exchange Commission over Canadian firm

In Summary
  • In a statement dated March 23, SEC  said it had temporarily suspended Kallo Inc, pursuant to Section 12(k) of the Securities Exchange Act of 1934.
  • Kenya's National Treasury lodged the complaint early this week
Treasury CS Ukur Yatani.
Treasury CS Ukur Yatani.
Image: FILE

 

The US Securities Exchange Commission (SEC) has suspended  from trading a Canadian firm  behind an alleged 1.06 billion (Sh139 billion) loan to Kenya.

This follows a protest by the National Treasury dismissing the documents as unsigned, false and a malicious loan contract filed by Kallo Inc purporting to have been entered into by Kenya.

In a statement, National Treasury cabinet secretary Ukur Yatani said Kenya lodged an official complaint to SEC over the documents and claims.

''The National Treasury requested SEC to investigate this matter with the potential to irreparably harm Kenya's fiduciary standing internationally,'' Yatani said. 

In a statement dated March 23, SEC  said it had temporarily suspended Kallo Inc, pursuant to Section 12(k) of the Securities Exchange Act of 1934.

''The Commission has serious concerns, for example, about the accuracy of the Company’s claim that it has entered into a contract with the Republic of Kenya to establish a comprehensive healthcare structure,'' the statement read in part. 

The regulator cautioned broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.

It added that any broker or dealer is uncertain as to what is required by Rule 15c2-11, should refrain from entering quotations relating to Kallo’s securities until such time as it has familiarised with the rule and is certain that all of its provisions have been met.

''If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action,'' SEC said. 

The suspended firm claimed to have signed a loan agreement with the Kenyan government in the wake of rising cases of coronavirus in June last year.

In a story published by the Business Daily, under the deal, Belarus-based Techno-Investment Module (TIM) provided financing for a project labeled the Kallo Integrated Delivery System (KIDS), whose details remain scanty and were not made public in Kenya.

Kenya's exchequer vehemently denied entering the deal, terming the story as misleading. 

“Treasury wishes to categorically state that the CS Ukur Yatani did not enter into any loan contract…with a company by the name Kallo Inc. as claimed in the article and in the company’s filings with the US Securities Exchange Commission (SEC),” National Treasury said.