Why Kenyan billionaires leave kin in drawn-out wars after death

Majority of Kenyan billionaires do not put in place mechanisms to guarantee that their businesses live after them.

This has resulted in many companies fading away or grossly underperforming once their owners are out of the picture. In numerous instances, such businesses have been subject of fierce battles among dependents, which is evidenced in court cases that go on for ages and drag the life out of the companies.

A new report shows that the super-rich in Kenya do not develop succession plans for their businesses. ‘The Wealth Report’ by Knight Frank shows that only four out of 10 very wealthy Kenyans have such plans for their businesses.

“Globally, the response was just 53 per cent, with a high of 65 per cent in the US and a low of 40 per cent in Kenya. This highlights the scale of the issue and helps to explain why private banks and wealth advisers are putting so much effort into helping their clients with succession planning,” said the report.

“Our research into wealth transfer found that a significant number of wealthy families are unprepared to pass on their legacy and knowledge to the next generation. This highlights the scale of the issue and helps to explain why private banks and wealth advisers are putting so much effort into helping their clients with succession planning.”

At 40 per cent of the wealthy families putting in place succession plans, Kenyans are behind their counterparts in Africa where the report notes that 47 per cent of the very rich have in place robust plans to pass on their wealth to the next generation.

There are 1,290 Kenyans that fit the classification of super wealth, having assets that add up to Sh500 million. In the course of last year, there were 180 new individuals that joined the exclusive dollar millionaire club and are now worth more than Sh500 million.

The report also indicates that there are 90 Kenyans in the more exclusive league of individuals whose assets are valued at more than Sh5 billion.

A number of wealthy Kenyans have over the years died without putting in place proper measures to guarantee survival of their businesses and further grow the billions.

What follows are usually fierce battles among family members and in some instances partners with whom they co-owned some of the businesses.

Among the billionaires whose billions are subject to drawn-out court battles include former minister Njenga Karume whose family and trustees appointed to look after some of his wealth and beneficiaries.

Another of the very wealthy Kenyans whose wealth has been subject to court cases is Gerishon Kirima whose monthly income from rental houses alone runs into millions and who saw his family start fighting for his wealth before he died in 2010.

Former Cabinet Minister Mbiyu Koinange’s wealth was also subject to a prolonged court case, where family was in and out of courts for 34 years.