Trustee Debate: Why Kenya is lagging behind

The planned Jacaranda hotel auction in Njenga Karume, a politician in Nairobi, shed new light on the ability of administrators to oversee businesses.

While trusts are solely responsible for preserving badets and managing the transition to ensure the prosperity and even growth of a company in accordance with the founder's vision, recent events reveal a blatant trench in trusts in Kenya.

The Karume Trust has been involved in numerous lawsuits filed by the family, which once accused the trust of having undermined its properties.

Several families are fighting over the badets left by their missing relatives. These disputes, when they are not quickly resolved, invariably lead to the collapse of once vibrant societies.

Advantech Consulting General Manager Joseph Waruingi said that family conflicts and the collapse of once-successful businesses were due to the lack of processes and management systems that perpetuate the loopholes of theft and loss.

"The best way to prepare for the expansion is to hire professionals who will put in place management structures and help you understand the future prospects of your industry.

The founders and their children have little management expertise for companies that grow beyond a single branch, "said Mr. Waruingi, a former partner of PwC, whose firm advised government agencies and private sector in 23 African countries.

Mauritian prosecutor Asaad Abdullatiff, head of Axis Fiduciary, who advises on wealth management, transition and corporate structure, says that trusts, when properly managed, should enable businesses and families to negotiate transitions smoothly.

"A trust does not have to take over the management of a company, but must oversee its operations by including the heirs in their respective roles, or as major shareholders," he told Sunday Nation. .

The founders, he adds, must oversee the badignment of specific roles to their children, thereby reducing conflict.

"The founders sacrificed and had sleepless nights to start their business while their children watched it grow, but the third generation found that everything was smooth and enjoyable. It's this generation that plunders wealth like there was no tomorrow, "Abdullatif said.

"The first disaster is the subdivision of property, which sees wealth distributed in unprofitable units, while those who stay in business ruin any opportunity for growth by using the emotions and rivalries of childhood in decision-making," he added.

He warns that blind expansion without proper business structures exposes the company to new family feuds fueled by increased mistrust.

"The takeover of a business by a new generation increases the value of the business, but family quarrels threaten the collapse of any business, regardless of its size," warns Mr. Abdullatiff.

Axis, which plans to set up an office in Kenya to oversee East African clients, draws its customers from various sectors such as real estate, technology companies, fast-moving companies and retail chains. retail.

Abdullatif said the implementation of the double taxation treaty between Kenya and Mauritius could create more trusts willing to enjoy the benefits of a trustworthy office in Mauritius.

"It's good for both economies as we manage the reinvestment funds in Kenya, creating jobs and helping families," he said.

While trusts are gaining popularity, Mr. Abdullatiff said they were carefully reviewing all registration requests to prevent incidents in which Mauritian banks are used as havens for stolen funds.