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CMA warns against firm wooing women investors only

Monday September 2 2019

Paul Muthaura

Capital Markets Authority (CMA) chief executive officer Paul Muthaura. FILE PHOTO | NMG 

BRIAN NGUGI
By BRIAN NGUGI
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The Capital Markets Authority (CMA) has warned the public against investing in a capital raising venture by a firm targeting women investors.

The regulator said Monday that the activities of the Nairobi-based firm going by the names WIE Limited or Women Investing in Entrepreneurship (WIIE) are not authorised.

CMA said an undisclosed amount of money has already been raised from 279 unnamed women.

“The Authority’s preliminary investigations revealed that WIE Limited has been raising money from the public through a public offer of shares targeting women as their customers and also branding itself as a women’s income and wealth incubator,” said CMA chief executive Paul Muthaura in a statement.

“WIE Limited business model furthermore seems to have been endorsed by various women celebrities in the country in a bid to lure more women investors.”

He added that CMA in collaboration with other law enforcement agencies has frozen the company’s bank account pending further inquiries, noting that the nature and features of the capital raising by WIE is taking the form of a regulated activity, which has, however not been approved by the regulator.

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The CMA said WIE was offering 65,000 shares to investors clustered into 10 lots of 6,500 shares each — for Sh10,000 in the first month, Sh15,000 in the second month, Sh25,000 in the third month and Sh35,000 per 10 shares in the fourth month.

“Based on this model and the attached prospectus from the firm, the share price was variable. The funds were intended to facilitate promotion of the Women Investing In Entrepreneurship (WIIE) concept. It is noted that the company has since deactivated its social media accounts,” said the CMA.

“Members of the public are therefore urged to exercise caution before participating in any public offer lacking regulatory sanction.”

Efforts by the Business Daily to reach the firm were futile as its telephone contacts provided on its website did not go through.

In its prospectus, the firm is dangling a 25 percent return in front of prospective investors, rising as a result of making referrals down the road in a scheme reminiscent of multilevel marketing or a pyramid scheme.