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How teachers lost Sh2bn for buying bank in the red

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Mwalimu National Sacco has soaked in losses of more than Sh2 billion from its 2015 acquisition of a majority stake in Equatorial Commercial Bank, in which business tycoon and founder Naushad Merali had a controlling interest.

The Sacco, owned by teachers, invested a total of Sh2.4 billion to take a 75 percent stake in the lender, which later rebranded to Spire Bank.

According to businessdaily.co.ke, the bank has remained in losses that have whittled down its book value to Sh551.6 million as of September, placing the worth of Mwalimu’s stake at a mere Sh413.7 million.

This represents a loss of Sh2 billion or 83 percent on the investment made four years ago.

Sameer Africa group chairman Naushad Merali. FILE PHOTO | NMG

Spire Bank has inadequate capital and needs to raise more funds from shareholders to comply with the regulatory requirement of Sh1 billion minimum core capital.

The losses have over the years eaten up the bank’s core capital, which currently stands at negative Sh1.3 billion. The lender has never paid a dividend since Mwalimu became a shareholder, adding to the weight of losses that teachers have had to bear from the transaction.

Source: Business Daily

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Business

Why ignorance of finer details hurts lazy home buyers

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Who does not want to own a home one day? It is the endeavour of nearly every family. It is a pride, an achievement if I may. Yet we make careless mistakes at the tail of the tedious sweat to the realisation of this dream. Let me first put things into perspective; our construction ecosystem remains stubbornly fractured and dysfunctional. It is highly fragmented and very conservative.

Ingrained practices make it incredibly punitive and unforgiving. Before deciding to buy a house, you must wake up to this realisation.Most home buyers are lazy, careless and easily gullible.

They are, by large, only fixated with house prices and retreat to their ‘paradise’ cocoon once the house price makes sense to them. This attitude has been the icing to spurious developers. Listen, buying a house, especially off-plan, requires vigilance.

a`There are several boxes that must be closely monitored and ticked. Unfortunately, one of the critical boxes that always evades most buyers is the defects liability period. Many have and still painfully paid for this ignorance