Kenyan businessman Naushad Merali has retired as chairman of Bharti Airtel ’s Kenyan operations.
Merali, who is one of Kenya’s richest men with a fortune that Forbes estimates at $440 million, has chaired the company for the last 15 years. According to a report by Kenyan radio station Capital FM’s news site, the 63 year-old tycoon is stepping down in order to dedicate more time to other companies within his conglomerate, the Sameer Group.
“I take this opportunity to sincerely thank the entire board for the support extended to me during my tenure as chairman. I will always be available to assist the board and the company whenever I am required to do so,” Merali reportedly said in a press statement on Friday to announce his retirement.
Merali, 63, was the founder of Kencell, a company that won a mobile telecom operating license in 1999. Kencell was jointly owned by Merali and French media giant Vivendi who respectively held 40% and 60% equity. In 2004, when Vivendi decided to exit Kenya, South African telecoms giant MTN sought to buy out Kencell’s stake. Merali, as the second largest shareholder in the company, had a pre-emptive right that gave him the first opportunity to buy Vivendi’s stake before it was offered to a third party. Both MTN and Merali put in a bid of approximately $225 million for the stake, but Merali had great difficulty in raising the required amount to finance the deal within the agreed timelines. As the time limit neared expiration, it was almost certain that Merali was losing out on the bid.
In a desperate last minute bid, Merali reached out to Celtel founder Mo Ibrahim, who gave him a loan to finance the deal. Kencell made the winning bid for Vivendi’s stake, acquiring it for $230 million. He famously sold it less than an hour later to Mo Ibrahim’s Celtel for $250 million, earning a healthy $20 million profit. Popular legend has it that while Merali was negotiating the deal in one room with Vivendi’s top bosses, Mo Ibrahim and his Celtel executives were seated in the next room. Immediately after Merali acquired Vivendi’s shares, he simply walked to the next room and sold it to Ibrahim. That episode remains a favorite tale in corporate boardrooms across Africa even today.
Kencell subsequently rebranded as Celtel Kenya. But over the years, the company has undergone a series of ownership changes. Celtel Kenya was subsequently acquired by Kuwaiti firm MTC in 2005, and MTC eventually sold its shares to Bharti Airtel India in 2010. Merali remained chairman of the company all through the changes. Between 2008 and 2009, he offloaded the bulk of his shares, earning more than $150 million in the process. He now owns 5% of Bharti Airtel Kenya, but still remains the largest individual shareholder.
Naushad Merali made his fortune building the Sameer Group, a Kenyan conglomerate that has interests in everything from commercial banking to offshoring, construction, energy, property and information technology. Sameer is named after his first son, Sameer Merali, who is generally regarded as Naushad Merali’s heir apparent.
Airtel Kenya has not yet announced a new chairman.