CMA slaps Sh15m fine on Real People bosses for misuse of funds

Real People CEO Daniel Ohonde (left), board member Nthenya Muli and Nairobi Securities Exchange chief executive Geoffrey Odundo (right) at the bell ringing to mark the start of Real People bond trading at the Nairobi bourse on August 19, 2015. FILE PHOTO | NMG

The Capital Markets Authority (CMA) has fined four former directors of microlender Real People a

combined Sh15 million for their roles in diverting proceeds of a Sh1.3 billion bond to South Africa.

The lender raised Sh1.3 billion in 2015 from Kenyan investors to issue loans to local customers but the bulk of the money was wired to its parent company in South Africa to pay an internal loan.

This landed nine former bosses and directors – four Kenyans and five South Africans, in trouble with the regulator who ordered an inquiry into the company.

Five of the nine executives have opposed the regulatory action at the CMA tribunal, while the four have been fined between Sh2.5 million and Sh5 million.

“CMA initiated an investigation into the matter and noted that there appeared to have been a plan involving RPKL (Real People Kenya Limited) and RPIHL (Real People Holding International Limited), South Africa to use the medium-term note proceeds to settle an intercompany loan even before the application, approval, and issue of the medium-term note,” CMA said.

The Kenyan unit of Real People is fully owned by South Africa firm—Real People International Holding.