Sanlam Kenya says it will pursue, to the bitter end, recovery of Ksh1.114 billion it lent to various corporates before they were declared insolvent.
Patrick Tumbo, the new regional Sanlam Group’s chief executive, said that a law should be enacted to hold accountable individuals that seek debt through corporate bonds and mismanage the fund.
“People who take money from the public and run away with it, they should be punished severely,” he said during his first meeting with media at the newly opened Sanlam headquarter in Westlands.
In its latest financial book, Sanlam was forced to impair non-performing corporate bonds of Ksh1.114 billion resulting in issuance of profit warning.
Some of the corporate bond investees included Athi River Mining Cement (Under Administration) Kshs 574million, Real People Kshs 398 million and Kaluworks Kshs 169million and unspecified sum in Nakumatt.
With some of the firms protected under the Insolvency Act, pursuing individuals through legal redress seems to be the best option for Sanlam to recover its monies.
Going forward, the underwriter will undertake a lot of diligence in future investments, and this will include temporarily steering away from investing in corporate bonds.
“The commercial paper market is at the lowest confidence time ever due to failings of other private firms going under,” said Mr Tumbo.
The underwriter says it will invest in portfolios not exposed to high risks through its Sanlam Investments EA Limited vehicle, which was created after the acquisition of PineBridge Investments EA.
Mr Tumbo also revealed that full integration of Saham, which it fully acquired in 2018 after it bought the remaining 53.37 per cent stake for $1.1 billion, will be finalised within one-and-a-half years after it received the nod from Competition Authority of Kenya. This includes change of name to Sanlam.
“The integration process is long and very tedious. You do it in a manner that does not cause discomfort to the public and the market shareholders,” added Mr Tumbo.
As part of regulatory requirements and readiness to ensure compliance with the new Insurance Act that provides for Risk Based Compliance, Sanlam Kenya continues to recapitalise both the Sanlam Life and Sanlam General business in readiness to comply with 2020 Risk Based Capital deadline.
“Our CAR (Capital Adequency Ratio) is above 100 per cent, and we are on track to achieve the 200 per cent target,” he added.
The firm is also adoption of an operating strategy focusing on its Life and General insurance businesses following the recent amalgamation of Sanlam Kenya’s former Investments and Asset Management subsidiary (Sanlam Investments Limited) into the new Sanlam Investments East Africa Limited (SIEAL), allowing for dedicated focus on insurance services by the group.
As part of the strategy, the firm has shifted its headquarters and central customer experience centre to the new purpose built Sanlam Towers o provide an all under one roof solution for life and general insurance clients.
Previously, Sanlam Life had been operating from Sanlam House along Kenyatta Avenue and Sanlam General Insurance from Gateway Place along Milimani road, Nairobi, which have now been put in market for sale.