Federal agency invested millions in money losing Kenyan company without 'due diligence'
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FinDev Canada, created by former prime minister Justin Trudeau in 2017, says in an internal memo it did no “due diligence” before investing millions into a money-losing cellphone company in Kenya, according to Blacklock’s Reporter.
The federal agency, known more formally as the Development Finance Institute, admitted as much in the memo they withheld for six years under the Access to Information act.
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Trudeau created FinDev Canada with a $300-million budget “to support private sector investment in developing countries.”
“Due to lack of time, team must rely on due diligence performed by others,” said minutes of a Nov. 10, 2017 meeting of the board.
A separate staff email said: “Because (our) first transaction will be the object of significant scrutiny, we will need to ensure the rationale for our involvement is articulated clearly and convincingly.”
The agency’s first investment was buying US$10 million shares in M-Kopa Holdings Ltd. of Nairobi, a door-to-door sales company marketing cellphones and housewares.
Access To Information records, approval for the M-Kopa agreement came only weeks after being contacted by the company’s CEO.
Since 2018, FinDev has bought additional M-Kopa shares for a total of $43.4 million.
Over the same period, M-Kopa reported $138.6 million in combined losses but FinDev wouldn’t say how much taxpayers have lost.
“FinDev takes seriously its responsibility for transparency regarding its financing and investment activities,” the agency said in a statement.
“At the same time FinDev is mindful of the need to protect certain commercially sensitive or personal and otherwise restricted information related to its private sector clients or other stakeholders. The information you have requested is bound by these restrictions.”
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