Written by Lisa Murimi
A Canadian federal agency created under former Prime Minister Justin Trudeau’s administration has come under fire after revealing it lost Ksh6.9 billion in an investment in a Kenyan company.
According to the Toronto Sun, FinDev Canada — officially the Development Finance Institute — admitted in an internal memo that it failed to conduct proper due diligence before buying shares in the firm. The disclosure came on August 13, more than five years after the decision was made.
Minutes from a November 10, 2017 board meeting stated, “Due to lack of time, the team must rely on due diligence performed by others.”
A separate staff email acknowledged the high level of scrutiny the deal would attract, stressing the need to justify the investment convincingly.
The agency’s first transaction involved purchasing $10 million (Ksh1.2 billion) worth of shares in a door-to-door sales company marketing mobile phones and household goods. The approval reportedly came just weeks after the company’s CEO approached FinDev.
Records show that between 2018 and recent years, FinDev purchased additional shares worth $43.4 million (Ksh5.6 billion).
However, the company accumulated combined losses of about $138.6 million (Ksh17.9 billion) during that period. The agency has not disclosed the precise impact on Canadian taxpayers.
In a statement, FinDev said it remained committed to transparency but cited the need to protect commercially sensitive and personal information related to private sector clients.
The Kenyan company, founded in 2010, remains in operation and has expanded into four other African countries.
Despite attracting significant global investment, it has faced tax disputes in Kenya, including being ordered to pay millions in back taxes after losing a tribunal appeal.
The revelations have raised questions in Canada over oversight of public funds and the risks associated with overseas investments.
