Mr Andrew Franklin during an interview in Nairobi in 2012. Mr Franklin
has distinguished himself as a non-conformist investment adviser. FILE
By GEOFFREY IRUNGU, girungu@ke.nationmedia.com
In Summary
- FMC chief executive tells of his run-ins with the regulator and looming shutdown.
While many businesses would go to any length to
stop publication of news of an impending shutdown by the regulator,
Andrew Franklin, the chief executive of Franklin Management Consultants
(FMC), has been keen to share his story with the media.
The American national has been managing an
investment advisory business in Nairobi for nearly a decade but says he
may finally leave Kenya unless things dramatically change in his favour.
Mr Franklin has distinguished himself as a
maverick investment adviser who boldly takes on the dreaded Capital
Markets Authority (CMA), commenting on all manner of governance and
regulation issues that few licensees of the regulator would dare touch.
He accuses the CMA of being out to shut him up due
to his outspoken nature, and intends to forestall such action by
voluntarily closing down his business in 2014.
He has invited the regulator for a final audit on
his firm, which handles an investment portfolio of about Sh344 million
($4 million), ahead of the planned shut-down.
Mr Franklin wrote to the CMA to say he would not
seek renewal of his licence and that he was ready to close the business
by February 2014 after making arrangements to protect his clients.
His major gripe has been that the CMA refused to
allow his request to be exempted from several regulatory requirements
such as the appointment of a chairman and independent directors to
oversee management of the company.
He has also differed with the regulator on the
need for recapitalisation, arguing that his firm was too small to
require the extra cash and bureaucracy.
The CMA has stood its ground in enforcing the rules which it says are necessary for safeguarding investors’ welfare.
Extended licence
For the better part of 2013, FMC has been
operating on an “extended” licence, until the CMA asked him to explain
why it should not be revoked.
He sees this as harassment by the CMA, which he
says is unhappy with his criticism, such as when he took on the
regulator for not acknowledging in its annual reports significant
macro-economic developments such as the post-election violence of early
2008.
Yet that is not the only complaint that Mr Franklin has made against the Kenyan and American authorities.
He says he lost his title to a home he owns in
Lavington by virtue of the provisions of the new Constitution, and it
has to wait until it is regularised by the new Land Commission, as is
the case for many other foreigners.
“It is the only home I own, but I cannot
officially prove I own it,” said Mr Franklin, estimating the house to be
worth Sh138 million ($1.6 million).
The former US marine came to Africa more than 30
years ago, and decided to set up a business in Kenya. His office based
in Westlands is full of books, covering a range of subjects from
military and business to politics.
But he says he is disappointed with the “lethargy”
exhibited by many regulatory authorities. Even the American Embassy in
Nairobi and the entire US government are not exactly his favourites.
He believes they have been in conspiracy with the CMA to make his life as a businessman as difficult as possible.
More than once he has asked the American
government not to fund the CMA, but communications between him and the
US officials in Nairobi, as seen by Business Daily, indicate nothing concrete appeared to emerge from them.
The CMA sent a team of three people to the FMC
offices for the audit ahead of the company’s closure date, though
nothing has been made official yet.
“Inspection conducted by team of three for five
and a half hours; despite (acting CMA CEO Paul) Muthaura’s assertion of
urgency, nothing further? I guess the CMA will place notices in the
media … along with submissions to the Kenya Gazette to appear some time
in the New Year,” wrote Mr Franklin in an e-mail message.
Nothing can pacify him. He also traces his
problems to accusations he made — about which he has written several
times to the CMA — that some stockbrokers were involved with (Armenians)
Atur brothers, who were deported after brandishing guns at the Jommo
Kenyatta International Airport.
“The senior executives at CMA are not satisfied
that I have decided to abandon commercial activities dating back to
March 1991 but are also trying to show how much red tape and
professional malpractice can be launched in my direction,” he said in a
recent e-mail message in relation to the audit of his company.
Mr Franklin confesses that he has not been as good
a businessman as he would have wanted although he considers himself a
good salesman. He marketed insurance policies for years in the past
before he ventured into investment advisory.
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