Merali: Tough deal-maker who rarely misses target

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Naushad Merali needs no introduction in the business world. ILLUSTRATION | STANSLAUS MANTHI |   NATION MEDIA GROUP

By EVELYN SITUMA, esituma@ke.nationmedia.com

In Summary

• An old boy of Nairobi’s Highway Secondary School, Mr Merali often shies away from the limelight and is rather proud of the Zarina and Naushad Merali Foundation, a charity he runs together with wife Zarina.
• Mr Merali is one of Kenya’s super-rich, with his wealth estimated at Sh20 billion.
• Unknown to many, Mr Merali made his wealth by first purchasing unprofitable companies and turning them around in his formative days as an investor.

Naushad Merali needs no introduction in the business world. A man who knows when to snap up investments – and when to quit – he was this week back in the news over the sale of his Equatorial Commercial Bank (ECB).

Mr Merali has almost sealed a deal to sell a majority stake of ECB to Mwalimu National Co-operative, the largest sacco in the country populated by workers in the education sector.

But the Commissioner for Co-operative Development ordered a probe into the deal and appointed a team of three to look into concerns on the valuation, profitability and corporate governance at ECB in 15 days.

An old boy of Nairobi’s Highway Secondary School, Mr Merali often shies away from the limelight and is rather proud of the Zarina and Naushad Merali Foundation, a charity he runs together with wife Zarina.

Away from making super profits, Mr Merali has been a philanthropist and his foundation, for instance, donated Sh100 million to Kenyatta National Hospital for the construction of a 24-bed day care facility valued at Sh278 million.

The couple also spent Sh11 million on Jaffery’s Club, where he laid a professional walking track on a former dumpsite, transforming it to a sporting facility for cricket players, and ordinary Kenyans, complete with a mosque.

Mr Merali comes from a trading background.

His great grandfather was a cotton and spice trader who arrived at the east coast of Africa with other Indian pioneers in 1880s and settled in the coastal town of Lamu.

He is, however, a man of three nations. He grew up in Moshi and studied in both Kenya and the UK where he worked as a chartered accountant.

One of the problems cited in the current Mwalimu Sacco deal is that ECB is not profitable. Unknown to many, Mr Merali made his wealth by first purchasing unprofitable companies and turning them around in his formative days as an investor.

That is how he asked Frank Ryce, the owner of Ryce Motors to sell it to him in 1975 when he was still a teenager and had to ask a bank to lend him Sh600,000.

His next acquisition was in 1983 when he founded Equatorial Bank, then operating as a finance house. It is this bank that he wants to part with after 30 years.

Mr Merali is one of Kenya’s super-rich, with his wealth estimated at Sh20 billion. His biggest break came in the telecoms sector when he purchased Vivendi shares as the race to control Africa’s mobile phone market became a tussle between South Africa’s MTN and Celtel.

Mr Merali was not eager to deal with the South Africans as he was quoted saying: “The chemistry was all wrong.” This is perhaps one of the greatest investment battles that he fought, by reaching out to his billionaire friend Mohammed Ibrahim, the chairman of Celtel.

He exercised his pre-emptive rights and brought Celtel on board.