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The late business mogul Chris Kirubi had bought additional 5.8m shares in the diversified investment firm Centum, four months before he died. This was in a quest to expand his stake in the Nairobi bourse listed firm to 50%.
The octogenarian, who succumbed to cancer on 14 June, believed in wealth accumulation and associated himself with success, nothing less. A few hours to his last breath, he had even tweeted about success.
‘’Top of the morning to you, my dear friend. It doesn’t have to be a tiring Monday. Instead, I bring you good tidings of favor, success, achievements and happiness in the new week. Give yourself a go towards your success plan,’’ the tweet reads.
Although the serial entrepreneur – with interests in media, money markets, advertising, agriculture and manufacturing – had a team of first class executives running the show behind the scenes, little is known about his succession plan.
Little faith in family-run businesses
It is reported that doctors asked him to write his will after establishing that he had slim survival chance. Details of the will are still top family secret; however, his daughter Maryanne Musangi Kirubi, a top manager at Haco Industries – one of Kirubi’s business – is seen to be a front runner. At a memorial service in Nairobi last week, she vowed to keep her father’s entrepreneurial fire burning.
Kirubi had little faith in family-run businesses. In October 2014, during one of his online interviews dubbed Ask Kirubi, he expressed reservations saying most of such companies fizzle out in the absence of the founder.
“Family business can be born from the success of one of the member but the transition from the original founder to new blood must be well crafted to avert collapse due to many conflicting issues,’’ he said.
Kirubi however insisted that families should let a member who adds value to the business be in charge, a statement that now unknowingly puts the daughter in a pole position to carry the family’s flag at the business table.
His son Robert Kirubi, a top executive at DHL in Europe, declined an offer to work in his father’s business, pushing himself a step lower in the succession plan.
Although Kirubi’s biography states that he had two children and five grandchildren, a third child recently introduced herself to mourners, an indicator of possible future tussle over the businessman’s wealth.
Prior to reading the eulogy, she broke down on the podium; but in a show of support throughout her speech, her siblings stood beside her. “I want to thank you all for being here to remember and celebrate the life of my dad, Chris Kirubi. To those gathered here who I haven’t met, I am Fiona Kirubi, the youngest of his children,” she said.
Such unexpected introductions of an heir to a family business have been known to fuel feuds, leading to the collapse of business empires following the death of their founders. Top family businesses in Kenya that have suffered such a fate include those of the late Njenga Karume, Gerishon Kirima and John Michuki.
Kirubi’s successor ‘will have to play second fiddle’
Apart from possible family wrangles, trustees and business partners are likely to stand in the way of calm business leadership transition. As Maryanne jostles to take charge of her father’s over KSh40bn ($371m) business empire, she will have to get approval from his business partners.
For instance, the late businessman was yet to garner 51% shareholding to warrant him veto powers at Centum Group, whose share price at the Nairobi Securities Exchange has tumbled in excess of 40% since Covid-19 hit the country in mid-March last year.
Besides the usual boardroom fights as Centum searches for a new chairperson, Kirubi’s successor will have to play second fiddle to Centum CEO James Mworia – the apparent face of the listed company – in the absence of DJ CK, as Kirubi was popularly referred to in entertainment circles.
Mworia, a 43-year-old lawyer who has chauffeured Centum Investment since 2008, is said to be a confidant and a student of Kirubi. His vast knowledge of the company’s operations – spanning over a decade – puts him in a better place to take on the mantle.
An investor at the firm told The Africa Report that the board is likely to go for Mworia, based on his lengthy experience. Last week, the Centum CEO eulogised Kirubi as a father figure, mentor, cheerleader and top critic who never settled for less.
Undervaluation of the firm’s worth
Apart from the firm’s leadership vacuum, there is also Kirubi’s wealth risk devaluation of over KSh3bn at Centum Investment.
The firm’s share closed on Tuesday at KSh15.40, almost a shilling lower compared to the previous week when it was trading at KSh16.30. The firm’s share has shed 44% in value in just one year, the opposite expectation of Kirubi’s desire to see the share trade at triple digits.
The business mogul had previously said he would only sell his shares at a price of more than KSh100 apiece, implying that the prevailing market price represents a major undervaluation of the firm’s worth. Like most other stocks on the NSE, Centum has been the victim of the prolonged bear market that got new momentum from the pandemic.
Investors are counting on the new business leader to guide the company to its past glory. “I bought the share at KSh24, it is now at KSh15. I will thank the new chair who will provide necessary leadership to send the share back to the gaining trend,” said Bob Kirui, an investor at Centum.
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