The Capital Markets Tribunal has ordered assets management firm Amana Capital Ltd to refund investor Susan Mukuhi Kagiri her Sh21 million investment. The tribunal dismissed Amana Capital’s application to have an earlier decision on the refund by the Capital Markets Authority set aside.
In its ruling, the tribunal determined that Amana Capital cannot run away from its obligations and contract that it entered to with Susan Mukuhi.
“[Amana] cannot run away from the new contract and its obligations that they signed with the [Susan],” the tribunal ruled.
The Capital Markets Authority had earlier on ordered the assets management firm to refund Susan Sh21 million. Out of this, Sh7.7 million was to be paid back as compensation while Sh13.7 million were the funds she had invested with the manager.
Susan had invested Sh26.8 million in the Amana Unit Trust Funds Scheme in May 2016. She had made the investment in two instalments of about Sh11 million and Sh15 million. After making the investment, Amana had then advised her to switch her investment from the shilling fund.
Awhile later, Amana had then invested funds in the Nakumatt Commercial Paper Programme through the Amana Shilling Fund. The fund then ran into chaos following the operation troubles that Nakumatt went into and the eventual collapse of the retailer.
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On August 15, 2019, Susan applied to withdraw her entire investment in the Amana Unit Trust Fund. Amana Capital responded to her with an acknowledgment that her account had a balance of Sh25.7 million. The manager committed to pay her in instalments.
A year earlier in 2018, Amana claimed that it had held an extraordinary general meeting in which members resolved that the shilling fund that had been invested in Nakumatt would be frozen due to the difficulties the investment had run into following Nakumatt’s operational troubles.
Nonetheless, between October 22, 2019 and January 20, 2020, the funds manager paid Susan Sh8 million. It however defaulted on paying the balance of Sh17.7 million. This default prompted Susan to make an appeal with the Capital Markets, which ordered Amana to pay her within 14 days.
In its objections before the tribunal, Amana claimed that on December 11, 2018, Susan had signed a new investment management agreement for an investment of Sh26.5 million which she applied to withdraw in August 2019.
The manager claimed that she had attended the extraordinary general meeting that was held in February 2020 and voted to extended the moratorium on the troubled Amana Shilling Fund (ASF) where her funds had been invested.
Amana had gone on to claim that despite filing for a redemption in August 2019, Susan had remained a member of the ASF and had even gone on to receive monthly interests and statements. These objections were however dismissed by the tribunal.
