A constitutional petition filed in Kenya against M-KOPA Holdings alleges systematic racial discrimination within the company’s employee shareholding structure. It claims that it favoured white staff and international investors over employees of African descent.
The lawsuit was filed at the Employment and Labour Relations Court (ELRC) by Elizabeth Njoki, a long-serving Kenyan employee who worked at M-KOPA from 2012 to 2023. She alleges the British headquartered company deliberately created a shareholding scheme that disadvantaged staff of African descent while protecting white employees and global investors.
The core of the controversy is a 2019 board decision that restructured M-KOPA’s employee share ownership:
1. Growth Shares
A new class of shares was created and predominantly allocated to expatriates and white employees.
- Out of 48 recipients of Growth Shares, only seven were of African descent.
- In a subsequent share allocation round, no Kenyan employee was included.
2. Minor Holders
African staff were allegedly reclassified as “Minor Holders,” a designation that supposedly stripped them of crucial shareholder rights, including voting privileges, access to company information, and participation in shareholder meetings.
3. Superior Benefits
The Growth Shares came with superior benefits such as buyback rights, preferential pricing, and guaranteed exits at fair market value—privileges reportedly denied to African employees.
The petition suggests this restructuring was triggered by major investors after concerns about potential dilution of their holdings.
Alleged response to concerns and valuation issues
Ms. Njoki claims she was threatened with legal and job repercussions when she sought clarification about her share options. Court documents reportedly include emails warning that seeking legal advice could result in her being classified as a “bad leaver,” which would disqualify her from receiving any shares.
The petition also alleges the company engineered a “sham recapitalization” in 2021 to artificially suppress the company’s valuation, allegedly locking in gains for Growth Shareholders and preserving investor control.
M-KOPA’s legal objection
M-KOPA Holdings filed a preliminary objection seeking to strike out the petition. The company, represented by Anjarwalla & Khanna LLP, arguing that:
- Shareholder disputes should be heard in English and Welsh courts, not a Kenyan court.
- There is no employment relationship between Njoki and M-KOPA Holdings, making the Employment and Labour Relations Court an inappropriate venue.