They put 20% of the fund capital in one client(Nakumatt) whose financial status wasn't really transparent, it seems all risk analysis was flushed down the drain

That is Barclays bank

Fyi Amana's a sinking ship. Their Chief Investment Officer ( Reginald Kadzutu) who had defended the fund's investment strategy at AGMs jumped ship in August 2019. Be afraid!

Where did he go to(lest he takes that strategy there)?

Something Opus Dei never wants to hear. Has put gag on such comments by local dealers and managers.

Interesting... Musical chairs.

Did anyone recover their money from this? Ama it's Corona-d?

CMA has not helped any small investors at all, members club plus old money. Investment in any sector in Kenya, you are on your own - regulators are very useless.

A client on Amana received the below communication, yes their "money drank water"

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Below are extract of minutes and resolutions passed during the extra ordinary general meeting held on 28th February 2020.

Update on Class A Shares

Following the directive from CMA in August 2018 to impair the Nakumatt Holdings CP (NHL CP) within two (2) financial years effective on 31st December 2018 and further due to the outcome of the Nakumatt creditors decision to liquidate the retailer, and subsequent communication during the last Extra ordinary meeting held on 28th February 2020, the Class A shares has been impaired.

Update on Class B Shares

The moratorium Period on Class B of the Amana Shilling Fund was extended by a further six (‘6’) months up to and including September 6, 2020. During the moratorium period, the interest from investments will continue to be accrued and will be distributed at the end of the moratorium period based on the realized amounts.

Creation of Class C Shares

Class C was created for any new contributions from existing and new clients during the moratorium period. Contributions made from 15th January till the end of the moratorium period will be channeled to Class C meaning Class C shares are not affected by the Moratorium.

We confirm that the minutes are still under review by the regulator, Capital Markets Authority (CMA), Trustees (NatBank Trustees and Investment Services Limited) and Amana Capital Limited. We will share them immediately upon finalization and approval as earlier communicated in our holding statement dated 26th March 2020.

PROPOSALS TO AMANA UNIT TRUST SCHEME (UTS)- AMANA SHILLING FUND CLASS B HOLDERS FOR CONSIDERATION AND ADOPTION

The Amana Shilling Fund (the Fund) Class B Unit Holders (specifically) having been informed of the impairment of their interests in the Fund as a result of losses incurred due to the investment by the Fund in the Nakumatt Holdings Limited commercial paper are requested to consider and adopt one the three options provided below.

It is important to note ACL does not accept any liability whatsoever resulting from the losses incurred in the Amana Shilling fund in providing the options.



Option A:
ACL has carefully considered various options avilaible that would ensure that the Unit Holders are able to salvage their investment. To this end ACL will offer the Unit Holders the option of recovering their investment through their acquisition of an equity stake in ACL. The proposed acqusition of an equity stake in the Sponsor would be undertaken on a voluntary basis by the Unit Holders and would be subject to such terms and conditions as will be contained in a Subscription Agreement to be executed by each of the Unit Holders. The Subscription Agreement will include, inter alia, the following terms:

a) The 59% funds written off in the Amana UTS Shilling Fund Class B be substituted for a 30% equity stake in ACL. This process will be done via an issuance of new shares in ACL.

b) The 30% equity shares will be issued proportionally to individual holdings of funds lost in the Amana UTS Shilling Fund Class B.

c) The dilution in shareholding of ACL would be as follows:
(i) A new investor has been identified to take up a 60% stake ( down from 70%)
(ii) Existing shareholders ownership will be reduced from 100% down to 30% and further to 10%.

d) The Unit Holders will be eligible for board seats in ACL in proportion to their 30% ownership.

e) The balance of the funds still supported by assets (circa 41%) will continue to be held in AUTS and governed by the Trust Deed as is.

f) The new investor will through its local networks attract new funding in the targetted amount of Kshs 300 Million to be managed by ACL as the fund manager. These funds will be invested to earn fees and increase profitability and returns for all shareholders. The funds will be sourced within 60 days of the equity conversion date.

g) The new investor will dedicate their time to the recovery and growth of ACL

h) Profits will be paid out in the form of dividends after catering for the working capital needs of ACL from internally generated funds. The new investor will comit to funding any shortfall in working capital for a period of 3 years following the equity conversion.There will be no call on the unitholders to finance working capital for 3 years. .

i) Should the unit trust fund holders choose option B, they would be required to waive the right of any legal action against ACL as Sponsor.

j) The new investor and existing shareholders can approachthe unit holders to acquire the shares at market price (put option).



OPTION B:
If option A is rejected by the Unit Holders; then without accepting any liability whatsoever resulting from the losses incurred in the Amana Shilling fund, the ACL shareholders (i.e. the new investor and existing shareholders) would propose to dilute their shareholding to 51% and issue new shares worth 49% to the Unit Holders under the following conditions:

a) The Unit Holders will be eligible for board seats in ACL in proportion to their 49% ownership

b) The preference shares currently issued to the new investor in ACL would be redeemed and not converted into equity, resulting in the new investor’s automatic exit from ACL within a maximum period of 1 year.

c) The working capital needs of ACL would be funded by both the existing shareholders and the Unit Holders in proportion to their new ownership (i.e. 51%:49%)

d) Should the Unit Holders choose this Option B, they will be required to waive the right of any legal action against ACL as Sponsor.



OPTION C:
If option A or option B are rejected by the Amana shilling fund Class B Unit holders, they are then requested to consider the following:

(a) Forfeit their investment in the Fund in accordance with the Fund’s Trust Deed and Rules and cease to have any legal or beneficial interest in the Fund or otherwise to the Sponsor or Trustee of the Fund in any manner whatsoever; or

(b) To continue their investment in the Fund through the conversion of the available balance of their investments in the Fund into equity in ACL in the manner set out below under either Option B or Option C.