Frying pan to fire: Russia banking exile Steve Jennings took on Africa

By bne IntelliNews October 9, 2015

Jason Corcoran in Moscow -

Renaissance Capital founder Stephen Jennings may be enjoying better weather since fleeing Russia for Africa three years ago, but his problems seem to be mounting.

New Zealander Jennings, who founded RenCap 20 years ago, was ousted in November 2012 after his billionaire partner Mikhail Prokhorov rebuffed his requests for more cash for the operation, which was bleeding money.

Legend has it that Jennings lost the keys to the business after a showdown meeting with Prokhorov and Suleiman Kerimov, another tycoon who had substantial funds on account at RenCap. Jennings requested more funds to cover the firm's losses and the tycoons turned on him, demanding he hand over his 50% stake plus one share.

RenCap sources say Jennings, then 52, faked a heart attack to escape. An ambulance arrived and the driver was handsomely paid to divert to Sheremetyevo airport so Jennings could escape to London. He hasn't been back since.

Neither Prokhorov, Kerimov nor Jennings have ever spoken about what went down. Jennings eventually signed the papers, surrendering control of the investment bank and the consumer lender RenCredit to Prokhorov while retaining ownership of the group's African assets.

Fast forward three years and Jennings is in hot water in Kenya, where his difficulties make his plight in Russia seem like a teddy bears' picnic.

Plans to build a new city costing $5bn and stretching to 2,500-acres on an old coffee plantation outside the capital of Nairobi have been held up for years amid increasingly incendiary relations between Jennings and his local partners.
Tatu City is a 2,500-acre, mixed-use and mixed-income development with plans for residential, commercial, industrial, tourism, social and recreation amenities for more than 70,000 residents and 30,000 day visitors.

Jennings' partners, who are now his enemies, are Kenya's richest man Vimal Shah and Nahashon Nyagah, a former governor of Kenya's central bank.

At a public event in Nairobi in September, Jennings made a wide-ranging attack on Shah and Nyagah. He said Shah masquerades as a major shareholder when in fact he has only invested $289,000 in the project with a shareholding equivalent to less than 0.3% of the total investment.

According to Jennings, Nyagah orchestrated the illegal transfer of a large tract of land worth $100mn, owned by the Tatu City investors, to members of his family. Police are now investigating the matter.

Jennings described in painstaking detail the "theft, fraud and extortion" by Nyagah and his associates and how his partner Shah had "provided him with the cloak of legitimacy to commit what is probably the largest corporate theft in Kenyan history".

He and some of his colleagues in January were summoned to the immigration department and "interrogated for half a day about work permits", he recounted. "In 25 years working in about 35 emerging markets, this was my first experience of such cheap harassment. There is no official file because this is a crude and corrupt shakedown." Investigations by Jennings led him to believe the source of the grilling was Nyagah and his brother.

Jennings said the organiser of the event TatuTrueTalk, where he spoke publicly about corruption by Shah and Nyagah, was "threatened with thugs who would beat him up" unless he pulled out. One of his lawyers also received "a chilling, written letter of retribution".

In his first interview with Western media since 2009, Jennings told the New Zealand Herald on October 8 that being so vocal about public policy and corruption issues was not his normal modus operandi.

"We normally prefer to work behind the scenes. But normally we would get more support from government and more traction within the system," said Jennings, who says he now spends 70% of his time in Africa. "It's when we weren't getting that traction and we weren't getting that kind of support that we went more public with these issues."

Asked whether he faces any personal danger, he said: "We made the decision - and I think it was the right decision - that it would have been more dangerous not to speak out."

Jennings said he is commissioning "a senior investigative journalist'' two write a book on the Tatu City saga. Another good read would be a tome on the life and times of the Kiwi oligarch in Russia.

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