Social media was recently aflame with reports of how Mr Munga, 82, was on the verge of being auctioned when it emerged that he had actually bought 3.64 million shares in Equity Group, a bank he founded in 1984.
The tycoon—whose Sh510 million shares in Britam were at risk of being auctioned for non-payment of a debt of Sh433.77 million to ABC Bank—increased his stake in Equity Bank by buying Sh166 million shares, leaving many wondering what his true cash position was.
It is a paradox that has come to characterise Mr Munga’s business world, with reports of him inflating his estate competing for headlines in major local dailies with those of him fighting to save some of his properties from the auctioneer’s hammer.
Mr Munga is among the billionaires from the sleepy Rwathia village, Murang’a County, who are hailed as the pioneers of Kenya’s capitalism. Other Rwathia billionaires include Equity Bank CEO James Mwangi, whom Mr Munga recruited in the 1990s to turn around Equity Building Society which was facing liquidation. Equity Building Society was the precursor of Equity Bank.
Another billionaire who hails from Rwathia is Jimnah Mbaru, a prominent investment banker.
Gerald Gikonyo, the long-serving patriarch of the group Rwathia Distributors, major beer and spirits distributor for East African Breweries Ltd (EABL) and UDV Kenya Limited, is among the first generation of Rwathia investors who invested heavily in commercial properties in Nairobi’s downtown.
Although Benson Wairegi does not hail from the village, his close association with the Rwathia brothers has earned him a place in the coveted club.
Mr Munga, unlike the first generation of Rwathia entrepreneurs like Gikonyo, who are famous for creating the bustling market of hawkers on one side of Moi Avenue, has been an active participant in the growth of the financial district in uptown Nairobi.
Besides Equity Bank, Mr Munga also has shares in Britam Holdings, an insurance provider and Housing Finance Group, another bank which for long was a mortgage lender.
He is a major exporter of macadamia through his two firms, Equatorial Nut Processors and Freshco Seeds Limited. Farm Nut Co., which he started in 1994, was Mr Munga’s first macadamia processing factory in Maragua, Murang’a County.
Mr Munga is also into education, having founded Pioneer Group of Schools, Nairobi-based Pioneer International University and St Paul’s Thomas Academy.
In 2015, he bought and revamped Meru Ginneries as he sought to cash in on the African Growth and Opportunity Act (Agoa), a United States trade act that provides eligible Sub-Saharan African countries with duty-free access to the American market.
A year earlier, Mr Munga had started Greystone Industries Limited in Gatanga, Murang’a County, to manufacture high-quality concrete poles for electricity transmission and distribution by Kenya Power and the Rural Electrification Authority.
These investments have rightly placed Mr Munga in Kenya’s billionaire club, giving him some financial muscle that has sometimes given him some political heft.
In the run-up to the 2022 General-Elections, Mr Munga was the chairman of a group of rich power brokers from Central Kenya under the umbrella of Mount Kenya Foundation who sought to influence the voting pattern of the GEMA community - Gikuyu, Embu, Meru Association.
Other members of the Foundation included media mogul SK Macharia, the former commissioner of the Kenya Revenue Authority, the late Michael Waweru, the late owner of Mastermind Tobacco Kenya, Wilfred Murungi, former MP Dennis Waweru, retired President Uhuru Kenyatta’s maternal uncle, George Muhoho, and former Head of Public Service Francis Muthaura.
Despite his economic accomplishments, Mr Munga, who retired as the chairman of Equity Bank in 2018, has been a constant feature in the court corridors, desperately fending off auctioneers.
In 2017, he almost had his Sh400 million property in Nairobi auctioned over an unpaid loan to Jamii Bora Bank, which has since been renamed Kingdom Bank after being acquired by Co-operative Bank. He was able to make a last-minute payment to Jamii Bora to save this property.
A firm owned by Mr Munga’s friend-turned foe, James Muturi Kamau, accused the tycoon of defrauding it Sh150 million. Before the two parties had an out-of-court settlement, Mr Kamau claimed that Mr Munga refused to pay for 3 million TransCentury shares valued at Sh150 million.
Mr Munga is alleged to have bought the shares from Mr Kamau’s firm to help offset a Sh40 million loan that Mr Kamau owed Equity Bank.
After paying the debt, Mr Munga was supposed to remit the balance to Mr Kamau. However,he refused to pay the balance, Mr Kamau told the court.
A Mauritian private equity firm, African Seed Investment Fund LLC, also asked the court to declare Mr Munga bankrupt after the businessman allegedly defaulted on a Sh60.7 million loan that had been borrowed by Freshco, a company he fully owns.
The court rejected Mr Munga’s request for Africa Seed to go after Freshco for the loan the company took in 2013.
Hate or love him, one thing is clear: Mr Munga is a shrewd businessman.
But some of his critics who heard about his so-called secretive purchase of 452.5 million Britam shares from the government of Mauritius in 2016 would describe him as cunning.
The deal resulted in a significant loss for the government of Mauritius, with Mr Munga, through his investment vehicle Plum LLP, paying Sh7.1 billion, even though there were rival higher bids of Sh11 billion each from South Africa’s insurance firm MMI Holdings and Barclays Bank (now Absa Group), according to findings of a Mauritian commission of inquiry.
Mr Munga, through the Richard Muhereza & Associates law firm, denied wrongdoing.
“Our client bought the shares on a willing buyer, willing seller basis from the government of Mauritius and fully paid for them,” said the lawyers.
