CMA intervenes in Genghis Capital property auction

Capital Markets Authority (CMA) has stepped into the tussle between investment bank Genghis Capital and a South African businessman over the auction of the firm’s property.

The High Court in a ruling on January 14 issued a 15-day notice to auctioneers to sell properties belonging to Genghis over a $2.74 million (about Sh354.55 million) debt.

CMA in an attempt to sort out the matter on Wednesday said that it is engaging Genghis to create a roadmap on how the firm intends to address the outstanding debt owed to its stakeholders.

This comes after South African businessman Auswell Mashaba instructed Moran Auctioneers to seize and sell office items to recover his debt.

Moran Auctioneers has already put up for sale office furniture, television sets, laptops, “In line with its investor protection mandate, the Capital Markets Authority (CMA) is engaging Genghis Capital Limited to get a roadmap on how the firm intends to address the outstanding debt owed to its stakeholder.

“CMA would like to clarify that clients’ assets are held in segregated accounts separate from the funds of Genghis Capital Limited,” said CMA.

“The operations of the Genghis Unit Trust Scheme are regulated under the Capital Markets (Collective Investment Schemes) Regulations 2023, which require clear separation of the roles of the fund manager from those of the custodian and trustee.”

CMA also clarified that client assets managed under the Genghis Money Market Fund and Mali Money Market Fund are secure, as they are held by a duly authorised custodian and overseen by an independent trustee.

The dispute stems from a $2,265,000 (Sh293.08 million) loan that Mashaba gave to Genghis on January 25, 2017, with a 7.25 percent interest rate. Mashaba obtained a judgment for $3,100,000 (Sh401.13 million), plus interest, after the investment bank defaulted.

A payment plan was part of the loan arrangement; the first instalment, Sh129.37 million, was due by December 30, 2021, and the remaining instalments were due through August 2022.

The auctioneer has identified various items for sale, including desktops, laptops, office furniture, and equipment, following a court order issued by the High Court deputy registrar on January 14.