Nairobi Securities Exchange to pocket Sh150m in Francis Thuo sale

The sale of Francis Thuo to Equity Bank will enable the NSE recover money used to settle the collapsed stock broker’s debts.

By James Anyanzwa

KENYA: Equity Bank Group has made a dramatic entry into the stock brokering business through the acquisition of a stockbroker that went under more than five years ago.

The grand buyout of Francis Thuo & Partners Ltd gives the country’s largest bank by customer base trading rights at the Nairobi Securities Exchange (NSE).

The deal, which has already been approved by regulators, will also see the NSE pocket an estimated Sh150 million.

This is the amount it used to offset the liabilities of Francis Thuo at the time of its collapse.

“We have approved the acquisition of Francis Thuo by Equity Bank on condition that if there are outstanding liabilities, they must be settled by the new owner,” Paul Muthaura, acting chief executive of the Capital Markets Authority (CMA) said on Wednesday.

Muthaura noted that NSE, which was appointed the statutory manager for the brokerage firm on March 5, 2007 for six months, had identified claims of between Sh155 million and Sh160 million.

He explained that the NSE organised for the settlement of these claims through the creation of a new seat, which it sold to the Russian investment bank Renaissance Capital for Sh251 million.

“This acquisition will enable NSE to recover the money it used to pay off Francis Thuo’s liabilities,” said Muthaura.

The broker is co-owned by the Rubia, Channa and Thuo families.

When contacted for comment, NSE’s Head of Market and Product Development Donald Ouma said he did not have the details on the transaction.