M-Kopa Fires Back At Former CFO Chad Larson In Stinging Defense Of Its Employee Shares Programme

‘Pay-as-you-go’ fintech M-Kopa has defended its stand on its employee shares’ programme, in a rebuttal to its former Chief Finance Officer (CFO) Chad Larson, who had earlier moved to Kenya’s Capital Markets Authority to assert claims that the business has been purposely undervaluing itself in order in order to give its African employees an unfair shares buyback value.

UK-domiciled M-Kopa offers most of its employees a ‘minor holders’ stock option based on the current valuation of the business; they are allowed to sell these shares back to the business or to investors at determined points in time. The company also offers some of its staff a ‘growth’ stock option based on future projections, which lock in the shareholders for a given period and may be sold in future based on the growth of the fintech.

In his communication to the regulator, Larson claims the company, which is currently undergoing its Series F funding negotiations with Sumitomo Corporation, should be valued at between USD 4-10 billion, based on its recent financial performance. In a response posted to its website, M-Kopa maintains that its Larson’s valuation theory is wrong, as such a figure would “equal the combined value of Kenya’s two largest publicly traded companies.”

While Larson argues that he is fighting for the rights of the company’s African employees, M-Kopa insists Larson’s public critique is more personal than business-driven. “(His) escalations have consistently aligned with critical business periods – suggesting coordination, not grievance,” they say.

The grievance, they claim, is based on Larson’s relationship with M-Kopa, which ended in 2018, when he left the business citing frustration over its loss-making position. While he still maintains a 1% shareholding in M-Kopa, the fintech claims he has since worked as an advisor for a direct competitor, thus rendering his current claims suspect. M-Kopa also says Larson only airs his grievances whenever M-Kopa is going through significant events such as its current funding round, making his arguments seem dishonest.

Larson’s claims bear a striking similarity to those raised by a former employee, Elizabeth Njoki, who took M-Kopa to court earlier this year, accusing them of racial discrimination in its shareholding scheme. In a case lodged at Kenya’s Employment and Labour Relations court, she said the restructuring of the fintech’s shareholding made their equity scheme less meaningful for Africans, while reserving the more superior growth shares for its expatriate staff.

M-Kopa argued that since Njoki was no longer a staff member, the Employment court was the wrong forum for this case – which, in any case, could only be heard in the UK where the company is registered. In its current rebuttal, M-Kopa says Larson and Njoki have been working together, citing the fact that they share the same lawyer as well as making the same claims of racism.

Although Larson denied these claims in a suit he had earlier filed at the High Court of Kenya, he has since withdrawn the case, while the CMA has stepped away from his latest petition, arguing that it does not have any jurisdiction over a UK-based business.

Featured Image Courtesy Of M-Kopa