Mwalimu National SACCO has fully acquired Spire Bank from Naushad Merali for undisclosed amount.
The deal to sell off Spire Bank begun in 2014 when the Competition Authority (CA) gave Mwalimu National SACCO a nod to acquire a 50% of the then Equatorial Commercial Bank (ECB) office space in Upper Hill, Nairobi. for KSh 500 Million.
Then Mwalimu National SACCO signed an agreement on 10th October 2014 to buy the banking and investment arm of ECB.
Mwalimu National SACCO then became the majority shareholder in ECB, having acquired a 75 per cent stake in the bank at the cost of KSh 2.6 billion. The financial plan involved Mwalimu National Holdings Limited acquiring 51% of Equatorial Commercial Holding (ECH) in the first and 24% stake in the next phase.
ECB was to offload a 51% stake at the cost of KSh 1,663,321,806 and a further 24% at KSh 782,739,673.00.
Clean Bill of Health
After receiving a clean bill of health from parliament and the Commissioner for Co-operatives, Mwalimu went ahead with its ECB acquisition.
Interestingly, a Government probe into the Mwalimu National SACCO-ECB transaction has been kept under wraps to this moment.
At the time of its acquisition, ECB was already in the red with a pre-tax loss of KSh 326.4 Million in the year ending December, 31st 2014, weighed down by bad loans made ahead of the controversial buyout by Mwalimu SACCO.
Recent unaudited results show that Spire Bank made a net loss of Ksh 556 million for the first six months of 2020 compared to a net profit of Ksh 81.48 million in the same period last year.
By Fred Azelwa.