The Centum Dossier: Retail Shareholders Serve Dr. Donald Kaberuka over Governance and Capital Allocation.
Dear Members of the Investor Community,
Following extensive consultations across our retail and minority shareholder blocks over the last week, we have reached a critical inflection point. For over a decade, equity owners of Centum Investment Company PLC have exercised immense patience, enduring a staggering ~80% public market discount to Net Asset Value (NAV) and severely compressed dividends. Meanwhile, the corporate narrative has consistently championed a paper wealth metrics framework that has completely decoupled from real, cash-backed realization for the true owners of the business.
We can no longer afford to treat parent-level debt-reduction briefings as a success when consolidated subsidiary debt has expanded to over KES 17.8 Billion, underwritten by punitive, double-digit alternative financing rates as high as 25% p.a.
Executives will always accept the contracts they are handed; it is the Board of Directors that underwrote these flawed, misaligned terms. Therefore, the retail shareholder community has resolved to bypass conventional executive channels and take these grievances directly to the ultimate custodian of governance.
Below is the formal, data-backed petition addressed to the Chairman of the Board, Dr. Donald Kaberuka, which will be delivered in person to the corporate headquarters at Two Rivers Office Towers. We explicitly expect a line-by-line accounting of these systemic issues during the upcoming institutional earnings call.
Read the full, unvarnished memorandum served to the Board below.
FORMAL SHAREHOLDER CORRESPONDENCE TOTHE BOARD
Date: June 12, 2026
To: Dr. Donald Kaberuka,
Chairman of the Board of Directors,
Centum Investment Company PLC,
5th Floor, Block Alpha, Two Rivers Office Towers,
Limuru Road,
P.O. Box 10518 - 00100,
Nairobi, Kenya.
Subject: SHAREHOLDER DOSSIER: Urgent Petition Regarding Capital Allocation, Strategic Mismatches, and Governance Oversight
Dear Dr. Kaberuka,
We write to you as a collective and deeply concerned block of retail shareholders of Centum Investment Company PLC. Following the recent public executive engagement session held on June 4, 2026, the retail investor community has consolidated its assessment of the company’s current trajectory. While we appreciate the executive team’s willingness to interface with the market, the disclosures made have heightened, rather than assuaged, our anxieties regarding long-term value preservation.
As the custodian of governance and the ultimate shield for shareholder capital, the Board of Directors must urgently address six systemic failures that continue to erode owner value. Given that the financial year-end has passed, we explicitly expect these critical matters to be comprehensively addressed, itemized, and accounted for by both the Board and executive management during the upcoming earnings call.
The five core structural failures requiring immediate redress are:
1. The Chronic and Severe NAV-to-Share Price Discount
Centum’s public market capitalization currently languishes at approximately KES 9 Billion, representing a profound and persistent ~80% discount to its stated Net Asset Value (NAV) of KES 49 Billion. While management routinely attributes this KES 40 Billion disparity to general market apathy or debt pricing, the market is explicitly signaling a total lack of confidence in the quality, liquidity, and governance of the underlying balance sheet. The Board cannot continue to treat paper NAV as a benchmark of success when the open market refuses to validate it.
2. The Growing Subsidiary Debt Burden and Communication Disparity
There is a profound and alarming disparity between management’s public reporting narrative and financial reality. In every investor briefing and public update, shareholders are consistently told that debt is systematically reducing at the parent/Group level. However, a forensic look at the last audited accounts reveals that overall debt is actually shifting and growing aggressively at the subsidiary level. Group consolidated borrowings increased to KES 17,854,674,000 in FY25 from KES 16,590,542,000 in FY24. Moving debt off the parent balance sheet and onto underlying subsidiaries does not mean the ecosystem is deleveraging—it merely obscures the risk. We demand absolute, unvarnished clarity on the exact consolidated debt load across all subsidiaries, their debt-to-equity levels, and a reconciled ledger explaining why public briefings continuously claim debt reduction while consolidated liabilities rise.
3. Overly Exaggerated Subsidiary Borrowing Costs
Compounding the growing subsidiary debt burden is the fact that certain operating entities are borrowing capital at highly exaggerated, punitive rates that sit significantly above prevailing market baselines. We note that financing structures at Johari Credit and Longhorn Publishers carry elevated premiums.
More critically, alternative financing structures at the subsidiary level (such as Two Rivers Development Limited) have reportedly scaled up toward costs of 25% p.a. with alternative and mezzanine lenders like Vantage Capital and Nedbank. These double-digit financing costs structurally outpace the yields of the underlying portfolios, creating an existential refinancing risk. We demand to know what specific commercial conditions or default clauses triggered these extreme interest rates, and whether they include penalty interest.
4. The Structural Mismatch and Slow Liquidation of Real Estate
The Board’s historical mandate to concentrate up to 80% of the Group’s portfolio in highly illiquid real estate (CentumRE, Two Rivers, Vipingo) has fundamentally broken Centum’s cash-generating engine. More alarming is the admitted Asset-Liability Maturity Mismatch: utilizing short-to-medium-term debt facilities (1–5 years) to fund real estate developments that require up to 9 years for complete project realization. While we note the current commitment to liquidate these assets to retire the senior Nedbank and mezzanine Vantage facilities, the pace of portfolio trimming remains structurally slow. Shareholders require a definitive, time-bound framework detailing exactly when real estate exposure will be brought below a healthy 50% threshold.
5. The Premature Divestment of Prime, Defensive Assets
To bankroll and sustain this illiquid real estate experiment, Centum has systematically dismantled its most reliable, cash-pumping, defensive pillars—most notably GenAfrica and Sidian Bank. Management justified these exits under the banner of urgent debt-servicing mandates. From the shareholders’ perspective, the Board has allowed the company to sell off cash-generating “cows” to defend a real estate framework that has flatlined operational returns. We demand an absolute freeze on further Private Equity liquidations (such as Isuzu East Africa) unless overwhelming, realized value is delivered directly to shareholders.
6. Systemic Underwriting Failures and Energy Project Write-Downs
The crystallization of a massive KES 4 Billion sunk-capital write-down across Akira Geothermal and Amu Power points to systemic flaws in the Group’s risk underwriting, political risk forecasting, and due diligence models prior to project authorization. During the recent public engagement, the executive team completely avoided breaking down the structural failures behind these multi-billion-shilling impairments. We petition the Board to institute an independent, proactive risk management audit committee that has the absolute authority to halt failing mega-projects before hundreds of millions of shillings are permanently impaired.
7. The Total Misalignment Between Executive Compensation and Shareholder Value
This is the most egregious structural failure under the Board’s current oversight. Over the past decade, equity owners have endured severely compressed dividends (dropping to a low of KES 0.32) and flatlined investment returns. Conversely, executive fixed pay saw a permanent +31.8% upward structural adjustment to KES 60 Million annually, alongside a cumulative executive payout of KES 750 Million.
The defense that this payout represents ~1.6% of AUM is an analytical sleight of hand. The fatal flaw underwritten by the Board is that management was heavily compensated based on accounting mark-ups and paper wealth long ago, while retail shareholders have been forced to wait over 10 years for real, liquid cash flows to materialize. When those paper assets subsequently evaporated via impairments, the cash used to pay those massive historical bonuses was already gone. This represents a total failure of alignment.
The Shareholders’ Demand for Action
Dr. Kaberuka, executives will always accept the contracts they are offered; it is the Board that underwrote these flawed terms. As the company approaches a critical management succession window, the retail shareholder community demands the following structural pivots:
A Transparent Consolidated Debt Ledger: Publication of a complete asset-to-debt matrix for every major subsidiary, listing its standalone WACC, explicit debt-carrying levels, and full disclosure on the KES 1,005,254,000 TRIFIC/SEZ interest expense line item (specifically separating cash-pay interest from non-cash capitalized interest).
A Cash-Backed Compensation Policy: A binding resolution rewriting the executive incentive framework. Moving forward, performance bonuses must be tied strictly to Distributed to Paid-In Capital (DPI) and realized cash exits, not paper NAV adjustments. If there is no cash returned to owners, the executive incentive pool must be exactly 0%.
Real Estate Guardrails: A formal policy ensuring that the real estate portfolio is structurally restricted from ever exceeding 40% of the total asset base in future strategic cycles.
Succession Criteria: Given the company’s asset mix, the next Chief Executive Officer must be recruited through a transparent process focusing heavily on deep, proven, hands-on Development Real Estate experience to aggressively extract the remaining KES 6.4 Billion cash buffer, retire subsidiary debt, and protect owner capital.
We expect a detailed response to these structural issues during the upcoming earnings call, failing which shareholders will seek to table these matters as formal, binding resolutions at the upcoming Annual General Meeting (AGM).
Yours Sincerely,
The Retail Shareholder Community