The day Naushad Merali made Sh1.6bn in record 2 hours

 Sameer Group founder Naushad Merali.
The Sameer Group founder Naushad Merali. PHOTO/FILE
Naushad Merali, the founder of the Sameer Group – a Kenyan corporation with activities in finance, construction and agriculture, is without a doubt one of Africa’s most astute business people.

Born on January 2, 1951 in Mombasa,  the Kenyan-Asian tycoon started transforming himself into a high profile businessman at the age of 25 by buying troubled companies.

In 1975, barely two years after joining Ryce Motors as the finance manager, Mr Merali bought the company from its owner – Frank Ryce – for Sh600,000. This deal was funded by the Commercial Bank of Africa (CBA) [then Bank of America].

Soon after the acquisition, Mr Merali and his wife (who owns half the shares in Sameer) secured the franchises of Komatsu and Daihatsu – breathing life to the business that was on its deathbed.

The next big deal for Mr Merali was the buy-out of the Bank of America’s stake in CBA in 1984. The deal, which was funded by local banks, was valued at Sh85 million. Today, he owns a 14 per cent stake in CBA valued at about Sh1.5 billion.

In 1985, Mr Merali acquired a 51 per cent stake in Firestone East Africa for Sh165 million. This investment later earned him millions of shillings when the company was listed on the Nairobi Securities Exchange (NSE) in 1994.

The tycoon has over the years bought (and sold) a long list of businesses including First American Bank of Kenya, Equatorial Bank and East African Cables – earning himself billions of shillings in the process.

Interestingly, Mr Merali holds the record for the largest profit ever made in the shortest time in Kenya’s business arena, having made Sh1.6 billion in less than two hours.

It all happened in March 2004 when an executive from French media giant Vivendi jetted into Nairobi to inform Mr Merali that the firm had signed a contract to sell its 60 per cent stake in Kencell to MTN of South Africa for $230 million (about Sh18.4 billion at that time).

That message did not impress Mr Merali (the co-founder of Kencell) who quickly informed Vivendi of his intention to excise his pre-emption rights (the right to buy additional shares in Kencell before the general public is given the opportunity).

This meant that Mr Merali had 20 days to express his intention to exercise his pre-emption rights and 15 more working days to raise the Sh18.4 billion that MTN had committed to pay for Vivendi’s stake in Kencell.

Mr Merali reached out to his wealthy friend and founder of Celtel Group, Mo Ibrahim, who after rounds of negotiations gave him a loan to buy out the Vivendi’s shares.

On the material day, Mr Merali (to the surprise of MTN) paid Sh18.4 billion to the French media company a move that made him the sole owner of Kenya’s second largest mobile service provider.

“At exactly 7.00 PM on Monday night, I signed the sale and purchase contract with Vivendi at the board meeting,” Mr Merali said in an earlier interview.

Without wasting any time, Mr Merali moved to meet Celtel executives who were waiting in the next room for another round of serious talks.

In less than two hours, Mr Merali sold the shares to Celtel for Sh20 billion (US$250 million) – earning himself Sh1.6 billion in profit.