Nairobi,Kenya:BUSINESS SUCCESSION: Death strikes when least expected. It cannot be prevented. Some say if death had a bail, many could have rushed to get bonds against it. When parents die, the most of the businesses they started fold.
This has been due to family succession battles, with each one of them wanting a piece of the business.
But some businesses have withstood the test of time, when their founders passed on. They have grown to become multi-million ventures, Protus Onyango examines some of them...
SHREWD BUSINESSMAN: Karume had good succession plans
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The late former Defence Minister who died in February last year, was a business magnate who left behind a multi-billion-business empire.
The businesses include the Jacaranda Group of Hotels (Jacaranda Hotel-Nairobi, Jacaranda Indian Ocean Beach Resort at the Coast, Lake Elementeita Lodge in Naivasha, Pizza Garden and Village Inn). Karume had interests in real estate and shares in leading corporations in the country.
Before he died, he formed the Njenga Karume Foundation to manage his investments on behalf of his heirs. He also formed a board to manage his Jacaranda Holdings. Mary M’Mukindia, the former managing director of National Oil Corporation Kenya is the chairperson of the Jacaranda Holdings.
M’Mukindia heads a Board of Trustees Mr Karume picked before he died. Tella Kawira, an administrator of the trust works in conjunction with a team of other managers and members of the Karume family.
He also employed professionals to run his business. He is estimated to be worth Sh120 billion.
James Chege, a hospitality industry expert is the Jacaranda Hotels Group sales and marketing manager. He is also the acting general manager of Jacaranda Hotel, Nairobi.
Mr Chege said the late Karume planned his succession early enough and this has helped his business to grow despite his demise.
“Mr Karume was a perfectionist who believed in planning. His family members have respected his wishes and this has made it easy for us as employees to grow the business,” Mr Chege said.
M’Mukindia praised Karume’s foresight. “Working with the late minister’s family has taught me that planning one’s succession is critical to business success that calls for family unity,” Mrs M’Mukindia said.
IMMENSE WEALTH: The Kenyatta’s vast empire puts them on list of Africa’s richest
The Kenyatta family controls a significant portion of the economy through diverse investments.
The family, whose one of the sons-Uhuru Kenyatta is now a President owns vast businesses.
They include Brookside Dairies, Kenya’s largest dairy company, Mediamax- a company that owns television station K24, The People newspaper, Kameme FM and a commercial bank in Nairobi. The family has invested in agriculture, banking, energy, tourism, mining, transport, real estate, telecommunication and insurance. The family also owns the biggest insurance company in Germany, jewellery shops in France and other businesses in Britain and the USA. Reports estimate that the family is worth Sh130 billion.
They have survived beyond the shadows of their father. Key managers in the Kenyatta family business empire include professionals from within and outside the country with only Muhoho Kenyatta and Christina Kenyatta as the two family members at the heart of the business.
Forbes Magazine recently published a list of Africa’s 40 richest persons with President Uhuru ranked 26th and the richest in Kenya. His net worth is an estimated $500 million, which translates to almost Sh50 billion. Forbes Magazine described his wealth thus: “Kenya’s President Uhuru is the son of Kenya’s first president, Jomo Kenyatta, and heir to some of the largest land holdings in Kenya. He owns at least 500,000 acres of prime land spread across the country.”
During Jomo Kenyatta’s 15-year reign there was a scheme funded by the World Bank and the British Government, the Settlement Transfer Fund Scheme, under which the family legally acquired large pieces of land all over the country.
Among the best-known parcels owned by Kenyatta’s family, for instance, are the 30, 000 acres in Taveta Taveta County. Others are 50, 000 acres in Taita that is currently under Mrs Beth Mugo, a nominated Senator and niece of the first President, 29, 000 acres in Kahawa Sukari along the Nairobi Thika Superhighway, the 10, 000 acre Gichea Farm in Gatundu, 5, 000 acres in Thika, 9,000 acres in Kasarani and the 5, 000-acre Muthaita Farm.
These are beside others such as Brookside Farm, Green Lee Estate, Njagu Farm in Juja, a quarry in Dandora, Nairobi and a 10, 000-acre ranch in Naivasha.
Other pieces of land owned by the Kenyatta family include the 52,000-acre farm in Nakuru and a 20,000-acre one, also known as Gichea Farm, in Bahati under Kenyatta’s daughter, Margaret. Mama Ngina Kenyatta, widow of the former President, owns another 10, 000 acres in Rumuruti.
GOOD PLANNER: Late Michuki’s board manage his firms
The late Environment minister was a rich man whose vast business interests ranged form hospitality, real estate among others.
He owned Windsor Golf and Country Club that sits on a 500 acres piece of land. He was one of the biggest landowners in Nairobi.
Before he died, he formed Fairview Investments Ltd as an investment firm to manage his businesses. Fairview Investments Ltd that also owns Cargen House in Nairobi’s central business district is also involved in property development. Michuki’s net worth is in the range of billions of shillings.
After school, Michuki took up big jobs in the civil service. He became PS to the Treasury in 1964 at 32 years, one of the first Africans to hold this influential position.
He also served as the chief executive of the Kenya Commercial Bank, minister for a number of ministries, including the Transport, where he introduced the famed ‘Michuki Rules.’
Marc Van Der Borght, the Windsor Hotel general manager describes the late Michuki as visionary. “He is a man who had long term visions and liked to surround himself with good professional people,” Mr Van Der Borght said.
“Mzee was a democrat and was like a president who loved good work. He had an open mind and liked to be listened to just as he was ready to listen to us.
He said the late Michuki’s businesses are managed by a professional board, whose chairman is not even a member of the family.
“He educated his children and all of them are supportive and understand their father’s vision. We are working on his vision and we have embarked on a 20-year strategic plan to expand his businesses,” Mr Van Der Borght said.
STRATEGIST: The late Saitoti was one
of the richest ministers
The late former Internal Security minister was one of the richest Kenyans. He once featured on the top 100 richest people in the country.
His family owns homes in Ngong, Kitengela, Lavington and Molo South where he has a ranch.
The business empire includes real estate and farming tea, coffee, pyrethrum and flowers for export. Some of his flower companies are Sulmac and Engasiti.
Close family friends said Saitoti employed managers to run his businesses but could walk in at any time and ask for books of accounts to audit. “He was a very keen mathematician and it was hard to try and lie to him about numbers. He left a will to guide the future of his businesses and how they will be shared among his heirs,” the friend said.
Succession woes: Family feuds dimmed Kirima’s sucession
Most family businesses disintegrate the moment parents pass them on to their children. The children, lacking in management skills eat up profits and quickly close shop, sometimes on multi-million ventures.
The late Kirima started business in early 1960s and registered most of his businesses under Kirima and Sons Ltd.He started off as a carpenter at the Royal College (now University of Nairobi) and operated a small workshop in Bahati and later in Kaloleni.
After independence, he opened bars and butcheries across the African and Asian neighbourhoods, taking advantage of the new monied elite.
In 1967, he entered into big real estate business and surprised many African elites, mostly ministers and senior civil servants in the Kenyatta government, when he bought 500 acres from Italian Donenico Masi in Nairobi. He also bought two other large farms in Nairobi, which included some 108 acres from British settler Charles Case and a further 472 acres from Percy Randall. He was a meat supplier and chairman of African Butchers Association and started a private abattoir in one of his farms in Njiru area of Nairobi.
Kirima once operated Kirima Bus Service competing with Dedan Njoroge Nduati’s Kimakia Bus Service as the two leading African-owned bus companies in Kenya against established British company Overseas Trading Company (OTC) on the central Kenya route.
Before demise, he owned buildings within the city estimated to be worth billions of shillings. He died a billionaire but his family started fighting over the property. However, Anne Kirima says what happened to her family was expected.
“In a polygamous family, you expect such rifts but we have learnt from it and have to go on and respect my dad’s wish of not letting his businesses collapse after his demise,” Ms Kirima said.
The mighty, wealthy Ndegwa’s
The late Philip Ndegwa was one of Kenya’s foremost economists and financial managers, who left a business empire that continues to grow. Ndegwa died on January 7, 1996. The Family has invested in agriculture, industry, transport, banking, insurance, air transport and real estate. Analysts estimates family wealth to be Sh118 billion.
The Ndegwa family holds shares through companies and nominee accounts. The family’s has interests in companies like Lion of Kenya, Mitchell Cotts and Insurance Company of East Africa, African Mercantile Banking (Ambank), shipping and airline businesses.
It also has interest in international markets through the London Stock Exchange and Wall Street. The family has holdings in African Marine and Engineering and Riverside properties. Others include Unga Group, EA Reinsurance Corporation, Hogg Kenya-an insurance firm, NAS Plastics, Kenya Auto Chemicals, ICL Kenya, Sameer Investments, East Kenya Bottlers, First Chartered Securities, Kilindini Travel Centre and NIC Bank. Mr Ndegwa joined the Civil Service in 1965 and become a government advisor on economic issues and planning.
He also served as PS in the Ministries of Finance, Agriculture and Economic Planning, Governor of the Central Bank in 1982.
He also served as chairman National Bank of Kenya, Agricultural Finance Corporation, the Kenya Pipeline Company, Kenya Airways and Kenya Revenue Authority.