Kenyan phone company bleeding after Canadian taxpayers bought millions in shares

The Kenyan phone company on the receiving end of millions of dollars from Canadian taxpayers lost more money again last year after a federal agency bought $43.4 million in shares.

M-Kopa Holdings Ltd. of Nairobi lost $23 million last year, according to financial records reviewed by Blacklock’s Reporter.

“It was again a year marked by important achievements,” the report by FinDev Canada stated despite the losses.

The company has never once turned a profit since taxpayers first bought shares of M-Kopa in 2017. The firm has in total reported combined losses of $138.6 million. M-Kopa shares are not traded on any public exchange and have not paid any dividends.

M-Kopa, a company that sells cellphones and home appliances door-to-door, is led by its Toronto-based CEO Jesse Moore, a former child activist who once received praise from the Toronto Star as a “voice of Canada’s youth.” Moore’s compensation stands at US$250,000 annually.

Our Kenya investment loses millions more thru @FinDev_Canada that sank $43M into a Nairobi door to door cellphone sales company to "create good quality jobs in East Africa."  https://t.co/k470O7l7XR #cdnpoli pic.twitter.com/qhxaDHAAI3

— Blacklock's Reporter (@mindingottawa) August 28, 2024

Access to Information records revealed that FinDev managers initially invested in M-Kopa with the expectation of creating “good quality jobs in East Africa.” Despite the significant investment, the share purchase has never been reviewed by a parliamentary committee.

“We are an investor with impact,” said Lori Kerr, CEO of FinDev, during her testimony before the Commons public accounts committee on February 29. “We put that impact lens on everything we do.”

The company’s records show that M-Kopa approved such a high number of new share issues that taxpayers’ investment in the company fell from 6 to 1.6 percent. To date, the company has issued 172.3 million shares to private investors.

“We are in the business of supporting private development in emerging markets and developing economies,” testified CEO Kerr. Share purchases were “about supporting development in emerging economies to support good quality jobs, to support raised incomes, tax revenues, etcetera,” she added.

All of this despite FinDev predicting that the company would reach a break-even point by 2020.

Access to Information documents reveal that FinDev acquired shares in Kenya’s M-Kopa without consulting its chief investment officer, as the position was vacant at the time. Additionally, the financial details of the company’s operations were not disclosed during the transaction. M-Kopa Holdings has primarily relied on credit lines and private share sales to offset ongoing financial losses.

“The group is under discussion to raise additional capital with new and existing shareholders which would support the operations for the foreseeable future,” management stated in a 2021 notice to shareholders. “The directors have made an assessment of the group’s ability to continue as a going concern.”