Con Investors Use Dubious Means To Want To Take Over Spencon

Starting an investment is like embarking on a long and treacherous journey. Along this journey, there are ups and downs, hills and valleys, sometimes light and sometimes total darkness.

The most challenging part of an investment journey is that there are so many fake destinations that look like real ones. Every time one feels like he or she has arrived at a real and genuine destination, it turns out to be fake.

Along the investment journey, one needs people. Remember, to succeed in an investment, it is not about how fast one reaches the finishing line but how many people one manages to reach the finishing line with.

A good investor works with others, learns from others and is always ready to move a step further, from the land of unknown to the land of light, as long as the direction the investment is moving has a promising future.

Partnerships are key on an investment journey. Sometimes you have to partner with some people for an investment to realize its full potential. Great businesses are founded on genuine partnerships.

Chinua Achebe says a kinsman does not call his kinsmen for a feast because he has enough or because they are dying of hunger in their own homes but because he knows what unity and working together for a common goal means.

Con and Greedy Investors

But what happens when the person/investment you partner with turns out to be a fraud and wants to take over what rightfully belongs to you? What happens when the friends you trusted as genuine business partners turn out to be greedy and after both your business and soul?

Sometimes, those who appear as genuine investors and who want to take your business to the next level turn out to be hungry, angry and vicious hyenas who are only after making profits and taking over what rightfully belongs to you.

In this series of six articles, Soko Directory will try to unearth some of the ruthless and cunning investors who are on the loose, investing in once vibrant and profitable companies and later bringing them down leaving them in financial ruins.

In this series, we shall tell you about the intrigues involving two companies; ECP and Spencon, bringing to the fore a war that is slowly driving Spencon into financial oblivion.

The Players

Spencon is an East African civil engineering and construction group that provides construction and engineering services for the construction of buildings, roads and bridges, power, transmission, and water supply infrastructure with operations across East Africa- Kenya, Uganda, Tanzania, and Zambia.

CDC Investment Group, according to the information on its website was established in 1948 and is a UK-based development finance institution. “We have been at the forefront of supporting companies that help poor countries grow for the last 70 years,” reads part of the information on the website.

The Journey

In September 2006, ECP Africa Fund II, managed by ECP Africa – an investment vehicle for the US private equity firm Emerging Capital Partners (ECP) – invested a total of $15 million in Spencon. Among the prominent investors in ECP Africa Fund II was CDC.

Trouble started in mid-2011 when ECP through their hired consultants, Andrew Ross and Steven Haswell conspired to wrestle control of the company from its founders by manipulating the findings of the internal audit reports with the sole aim of forcefully acquiring all of the company’s shares to “flip” the company at a huge profit.

Unknown to Spencon, ECP was in secret negotiations with, amongst others, one UAE based competitor who had expressed interest in acquiring the company.

ECP had offered to sell 100 percent of the company’s shares. Fortunately, this did not go through as the remaining Spencon founders blocked it through a court order. Had this greedy plan gone through, ECP would have yielded a 200 percent + profit – the case is still in court.

Spencon Holding has suffered a grave injustice because of ECP’s actions through their consultants, using their financial might and hubris to destroy its reputation, legacy and future vision it had for developing Africa.

Thousands of workers have lost their jobs, livelihoods, in addition to millions lost in undervalued assets sold by ECP. The founders would now want restorative justice to prevail and restore Spencon to its rightful owners.

Join us as we take you through this fraud in a six-series set of articles and you be the judge.