Corporate investment banker John Ngumi, who made headlines when he paid Sh111 million income tax for advising a private equity firm in the controversial Sh6 billion Telkom Kenya share transfer, has gone to court seeking anticipatory bail in connection with his role in the transaction.

Ngumi, a certified financial analyst and banker, is no stranger to high value transactions – or to controversy. In the Telkom Kenya deal that is still under investigation by the National Assembly, the Treasury was to buy back 60 per cent of the shareholding in Telkom Kenya from Helios Investment Partners, the private equity firm that Ngumi represented in the transaction.

The government was keen that Telkom Kenya does not remain in private hands given that it controls critical digital security infrastructure used by government Ministries, Departments and Agencies (MDAs) that hold crucial information with security implications.

Need for private investors

This was one of the reasons the National Security Advisory Committee (NSAC) gave when it blocked the proposed merger between Telkom Kenya and Airtel last year, considered one of the biggest telcos in Africa, although it is a distant second to Safaricom.

However, the question of whether Telkom Kenya will remain a parastatal is one that the current government has to answer once investigations into the transaction are completed. If it remains a parastatal, it is unlikely to become as competitive as Safaricom. To make it more competitive, it will be inventible to bring a private investor on board. And this will involve a substantial amount in both the purchase and related expenses, including transaction advisory services such as what Ngumi offered in last year’s deal.

The Telkom buyback deal was certainly not his first in the telco sector. In 2002, while working at Citibank, he was in the team that arranged Kenya’s largest interest swap for Safaricom. The deal was worth Sh4 billion. Four years later, while he was a senior manager at Stanbic Bank, he led a team that arranged a TZsh100 billion loan facility for another telco, Celtel Tanzania.

In the latest deal, which put him in the cross hairs of parliamentary investigations, Ngumi was paid $3.07 million by Jamhuri Holdings Ltd for advising Helios on its exit strategy from Telkom Kenya. Jamhuri, a Mauritius-based company, was among the firms whose senior managers appeared by the parliamentary committee to assist with the investigations into the deal that was concluded in October last year.

“They valued the advice I gave them and it was a willing buyer willing seller (transaction).”

From 2000 to date, the financial analyst has inked deals valued at $5.8 million. More than half of these — $3.4 million — were transacted in Kenya while $250 million were concluded in Tanzania and another $236 million in Uganda.

Ngumi, an Oxford alumnus, retired in 2015 and has been engaged mainly in advisory roles. Over his career, spanning over 35 years, he has worked with various African governments and corporates to manage high value foreign direct investments and private equity funds investments deals.

High Court judge Diana Kavedza directed Ngumi to deposit Sh500,000 bond as she granted his plea for anticipatory bail. “Pending the hearing and determination of this application the respondents, their servants, agents, including law enforcement are restrained from arresting, detaining or harassing the applicant,” Kavedza said in her ruling.