TransCentury Company Ltd grows from Sh1m investment club

Transcentury chairman Zephania Mbugua (right) meets CEO Gachao Kiuna when he announced the listing of the firm at Nairobi securities market in 2011. [PHOTO: FILE/STANDARD]

By KENNETH KWAMA

KENYA: The most successful investment club in Kenya’s history - TransCentury Company Ltd (TCL) started as a group comprising of 29 individuals 16-years ago with seed capital of Sh24 million, but is now worth billions of shillings.

Members of the group agreed to contribute Sh1 million each towards the venture, but only managed to raise Sh24 million because some associates were unsure about the project.

The money was then handed to former Nairobi Securities Exchange (NSE) chairman Jimnah Mbaru to invest on behalf of the members in the equity and government debt market at the NSE.

Today, all the founding partners are billionaires or multi-millionaires, courtesy of their suave business minds and the one million bob investment. Their status also owes a lot to their political connections.

Besides Mbaru, other group members include former Kenya Revenue Authority Commissioner General Peter Waweru, Zephania Mbugua, Peter Kanyago, Robin Kimotho, Joseph Kamau, Kariithi Njogu, Mbaru and Joseph Karago. Former KenGen CEO Eddy Njoroge is also a member.

Some of these people are very well connected politically with friends in high places. Kanyago and Njogu are said to be former President Kibaki’s golfing buddies.

Real power

For a long time, TCL was mired in secrecy. People only speculated about its activities until it became a public company, opening up for public scrutiny.

The mystery around it was perhaps due to the impression about the firm’s original founders. They are not only believed to wield real power, but in many ways have been seen to be the soul of discretion.

Kenyans know they are in business, but they have also been invisible like the dark side of the moon. In popular imagination, they were believed to be ruthless, especially to those barricading the road to business.

But TCL has also been a great inspiration to thousands of young professionals, who are now joining investment groups hoping to make it to the big league.

So where exactly does TCL stand now?

According to information on firm’s website, TCL seeks to invest in listed companies that are intrinsically undervalued but present strong investment return prospects.

In certain circumstances, it may acquire a controlling position in a publicly-quoted company where there is a clear value proposition and the intention from the outset is to actively create value, as it did with East African Cables (EAC) through its holding company Cables Holdings Ltd.

TCL acquired a 75 per cent stake in EAC in 2003 after it paid Sh240 million. The company’s value has since gone up more than 2,000 per cent and is currently valued at more than Sh10 billion, meaning TCL’s stake in EAC is more than Sh7.5 billion.

Incidentally, when the company announced the exit of its inspirational CEO Mugo Kibati, who now heads the Vision 2030 secretariat, share prices did not tumble as would have happened for other companies. TransCentury struck a deal seven years ago with Business Partners International Kenya - a small and medium enterprises fund, in which it acquired a 10 per cent stake valued at Sh105 million.