Everyone knew Lindani Dhlamini and Ndumi Medupe’s daily routine. Every morning the two would sit behind a closed door laughing and sharing stories, as old friends do, before launching into the day. On a cold winter’s morning in July 2007, the laughter stopped. Nothing could have prepared Dhlamini for what was to come. Medupe walked into the boardroom, sat across from her and calmly said: “You know Lindani, I’ve decided to pursue a different route”.
The silence was unbearable as a shocked Dhlamini took in a setback she never saw coming. She tried to talk Medupe into staying but there was no hope. It was merely a month before, during an interview with a magazine, where the two women gushed about how great it was doing business together. By the time the article made it into print, Medupe was long gone.
“We’re shutting this thing down,” Dhlamini thought as Medupe left the boardroom.
With her head bowed, she thought back to 2003, when the two eager young women set out in the market.
“At the time there was a lot of talk about empowering black owned businesses, women owned businesses and youth owned businesses. We felt we met all the criteria and we started,” Dhlamini says.
With a staff of 30 and R1.7 million ($170,000) seed capital from the Umsobomvu Youth Fund, the two women hit the ground running with their auditing firm, Xabiso.
“[The capital] got finished within six months of us starting… we had to go back many times,” laughs Dhlamini.
From the beginning the two women were inseparable. They depended on each other for everything and consulted each other on every decision made. But Medupe wanted out.
The days following Medupe’s departure were filled with turmoil and uncertainty. On the cusp of shutting the business down, Dlamini was overcome by sweet reason.
“I realized I had invested four years of time and energy into the business and I wasn’t willing to give it up that easily. I was going to see if I could do it by myself…and if it didn’t work out, well at least I tried.”
But before the silver lining; a dark cloud. After half the staff left with Medupe, Dhlamini stayed behind to calm the fears of those who remained. There was great uncertainty among clients but Dhlamini reassured them that there would be no shortcomings in service delivery.
“I had to go to each and every client and explain the situation. My partner has decided to pursue other interests. I’m still here; I’ll still be able to deliver what you need. If you have any issues whatsoever, call me directly.”
As the storm broke, Dhlamini was relieved that she had lost only one client.
“It was a difficult time for me, it really was&#8230;I’ve never been depressed in my life but I think I was depressed during that time,” she says.
After Xabiso recovered, Dhlamini set her sights on bigger projects and knew that in order to gain bigger clients she would have to merge.
In September 2012, Xabiso merged with auditing firm Sekela to form SekelaXabiso. Together they have a 20 years of auditing experience and their revenue at the end of February was close to R220 million ($22 million).
“We just got awarded the biggest internal audit contract by Transnet. It’s a R1.3 billion ($130 million) contract over a period of three years. We are the lead firm on this account.”
Looking ahead, Dhlamini sees only blue skies and hopes of fulfilling her Vision 2020 project to be a R1 billion ($100 million) company.
As for grudges and regrets? Dhlamini has none.
“You get to a point in time when you want different things. [Medupe] was here when she was supposed to be here and she wasn’t when she no longer needed to be here.”
Since Medupe’s departure, the two women have worked together on various projects.
“We are such a small community. You see there are 30,000 chartered accountants in the country, less than 3,000 are black and even smaller is the pool of black women. So you cannot afford not to like or not to get along with anybody in the small pool. Because more often than not sometimes you’ll find them sitting on the other side of the table being your client, which happens quite often.”
A lesson in life and a lesson in business: No matter how bad things get, don’t burn your bridges because you may find yourself shaking the hand of a familiar face.

Don’t Burn Your Bridges  Over Troubled Waters

It is a hot day in Lagos when we talk and yet you can feel the chill when Eryca Freemantle tells you of her worst day that left her body crushed and mind shattered. It was very cold on that day; December 14, 1990, in Brixton, London. A raw wind gnawed into Freemantle’s cheek as she tried to keep warm at the pay window of a busy petrol station. She knew how cold the streets of the capital could be as she was born in London of parents who emigrated from Jamaica in the 1950s.
“I was putting petrol in my car. I walked over to the kiosk to pay for the petrol and a lady came in with a Volvo Estate car and instead of putting her foot on the brake, she put her foot on the accelerator and made me into a human sandwich between the kiosk and her car,” says Freemantle.
“The glass from the kiosk shattered across my face. My body went into shock, my hair fell out there and then and my left leg was broken in five places.”
By cruel, or as it turned out, fortuitous coincidence, Freemantle’s father was near where his daughter lay in agony.
“My dad happened to be across the road in the pub, the Angel in Brixton, having a pint and he came out because there was a crowd around me. Someone had said to him: ‘A woman has just got run over at the petrol station. He had turned around to say: ‘Stupid. How can anyone get run over at a petrol station?’ At the same time, his left leg started twitching, he told me later.”
When the cold realization set in, Freemantle senior was beside himself with grief.
“He went over to have a look and saw me lying on the ground. He went into shock and started screaming. Everyone kept on saying ‘She’s dead, she’s dead!’ And he said: ‘God, why have you taken my only daughter?’ and in my semiconscious state, I could hear him. My father and I were very close and I remember thinking I don’t want to upset daddy, I have to get through this.”
Within minutes the ambulance came to take Freemantle away.
“My hair was on the ground and my dad had picked it up and put it in his pocket. He followed the ambulance to the hospital in my car. I was taken to the King’s College Hospital in South London, where they informed my mother. She was told they’d have to amputate my left leg. My dad said: ‘No way, before you amputate her leg, you will have to cut mine off.”
Freemantle spent months in hospital, luckily the surgeons did not amputate and she was left to heal. On release, she underwent physiotherapy every day for two years as she learned to walk again.
“I was also told I would also have a crooked walk,” she says.
Doctors told Freemantle her hair would never grow back again. For a while, the scars meant she had to cover her face. It was then that the demons of her traumatic childhood, at a tough London school, crawled from her subconscious and bared their teeth.
“I had been called ugly while I was at school and had always been teased about my looks. So, when this accident happened to me later, I took that as confirmation of all the things I had been called by the bullies at school,” she says.
Freemantle’s parents could not get her out of the house for nearly two years. Her scars held her prisoner.
“Now, this was the early 1990s, when there was no make-up for women of color and what was available was Derma-blend. I however went out and got some mud which I mixed with some water and put all over my face to cover my scars—that was my first ever encounter with make-up. Of course, that only lasts for so long but that gave me a bit of confidence, even if it was only for five minutes,” she says.
“My parents noticed  my new interest and thought it might be a good idea to send me to a make-up school, which was an idea that was frowned upon back then, in the West Indian culture, as you’d rather become a doctor or an accountant.”
Freemantle went to college to learn the trade and passed with distinction. She completed teachers’ training and the next thing she knew she was writing make-up classes for London College of Fashion. Her courses were endorsed by the British Association of Beauty Therapy and Cosmetology.
One day, the newly qualified Freemantle was invited by a friend, who was a model, on one of her photo shoots.
“When I got there, I immediately knew I could do a better job than the person who was working on her. I ended up doing her make-up and there was someone there from Island Records, who engaged me on the strength of my work at the shoot. Before I knew it, in a week’s time, I was doing celebrity make-up for names like Seal and Soul to Soul, Loose Ends. Whitney Houston would come into London a lot and I assisted her make-up artist,” says Freemantle.
“Seal was lovely, he used to wear his hair on his face because he used to have locks. He’s a very intelligent man, who was ahead of his time. I understood why they asked me to do his make-up, as he also had some scarring on his face.”
A pharmaceutical company, which had heard Freemantle’s story, approached her to create a make-up range. She said she would get involved only if it was a range for women of color. That is how Keromask was born.
Nearly a quarter of a century after the crushing accident that changed her life, Freemantle is in Lagos setting her sights on the world’s great emerging markets in Africa.
“There are many brands that are afraid to enter the market as they don’t know anyone on the ground… Africa is huge and many brands are looking to come in here presently. I see the biggest markets for make-up in Nigeria, Kenya and South Africa,” she says.
“Training is the way forward. In Lagos there are 500,000 make-up artists. A high proportion of them are not trained or are self- trained. So, there is scope for certification and international recognition.”
Anyone with the courage to claw their way back from being a shattered heap on the cold stone floor of a London petrol station is surely worth listening to.

Bloodied, Scarred And Unbowed

It was a hot summer’s day, just after midday in November 2003. John Field was sitting at his office in the wealthy suburb of Sandton, South Africa, when the phone rang.
“The Scorpions are coming!” said a colleague from Investec.
The Scorpions were the country’s feared anti-corruption investigative unit, now known as the Hawks. The word was that the Scorpions were coming not only to raid his company, FedGroup Holdings, but to close its doors.
The Scorpions never came, but it triggered years of turmoil. They left FedGroup to the Financial Services Board (FSB)—the regulator for the financial service industry.
“It was four years, but that first day was terrible. It’s hard to actually put it into words,” says Field.
The writing had been on the wall a week before. Field had received a letter from FSB saying it had found irregularities in his participation bond company, FedBond—a subsidiary of FedGroup Holdings, a family-owned investment and trust company.
If the Scorpions or FSB closed down FedGroup, Field would lose everything he had built since 1990. He founded the company; a participation bond company, FedBond and later FedTrust, which dealt in trusts, wills and estates. His investors, including around 10,000 pensioners, stood to lose everything.
It was a sorry chapter in a company Field had been working towards since 1984. In that year, he applied for a participation bond license from FSB, but it took six years, longer than he had expected. In 1989, Field bought the smallest participation bond scheme in the country at the time, Haley’s Trust—later renamed FedBond—for R100,000 ($39,000). It was the simplest way he could get a license to manage his own company. He registered the bonds at R340,000 ($133,700) and grew the investment to R1.6 billion ($271.6 million) in 10 years, to become the largest participation bond scheme in the country. A participation bond provides investors with the certainty of capital preservation, coupled with the consistency on interest.
All was going well until the letter from FSB stated that the company should stop receiving new investments. The inspectors from FSB said the company appeared to be cash-strapped and that the scheme did not qualify as a participation mortgage bond scheme.
A few days later, Field and members of his board were summoned for a meeting at FSB’s offices. The FSB registrar told them that, based on a report by inspectors, FedBond was terminally ill and declining in financial soundness. This was mainly because the properties bonded by the scheme were unsound or not generating sufficient income to be able to pay participants their interest and capital payments. FSB said FedBond had a net shortfall of R4.3 million ($584,200) in August 2003. The registrar concluded what the team dreaded: that FSB would apply for curatorship. This is a way of guiding an ailing company back to health, under the stewardship of a new management team.
“To this day I cannot understand what the rationale was to try to close us down. It just did not make sense,” says Field.
Prior to its court appeal in support for curatorship, the FSB had called Field to take over management of around three poorly run participation bond schemes. In every case, not a single investor lost any capital and all continued to receive monthly interest on their investment.
While Field was trying to grapple with how to handle the situation, Investec made an offer to FSB to purchase FedBond out of curatorship.
On December 3, 2003, FedBond was informed of a court application for curatorship. Not knowing his fate, Field withdrew R250,000 ($39,500) from his account to give to his wife and four sons, while preparing for the worst and the possibility of arrest.
The court turned down FSB’s urgent application for curatorship. Field’s lawyer told him that they had agreed on a joint management agreement, whereby a monitor would be appointed to oversee the operations of the company. The judge wanted to give FSB time to prove its claims, by postponing court proceeding to January 2004.
These court proceedings were then postponed to February, when a monitor was appointed. The monitor would  look for any reason FedBond should be out of business.
In June 2004, the monitor submitted his first report to the court. It was positive. He recommended that the company be allowed to make capital repayments to its participants. Following this, the FSB registrar submitted an affidavit saying the company would not be able to cope financially and that it should remain under curatorship. The court extended the monitorship to January 2005. The agony for the company would continue, but Field refused to go down without a fight.
January came around, when Field worked on an affidavit with his legal team to apply for dismissal of FSB’s application for curatorship, because he believed there was no good reason for it. Having heard counsel from both parties and read documents submitted, the judge agreed to postpone the application again, to June 2005.
To make matters worse, Investec applied to join FSB’s application for curatorship of FedBond, claiming that it had a R344 million ($60.5 million) stake in Field’s company. When Investec bought out Fedsure, FedBond was one of the subsidiaries, of which Field was sole shareholder. Field had pre-emptive rights to the FedBond shares and Investec reluctantly parted with them. As part of the deal, Investec left the R344 million ($60.5 million) in FedBond as bridging finance to serve as security for non-performing bonds. Field maintained that the funds were never part of the scheme. Investec now claimed it was a participant and should therefore be secured and ranked equally with all the other participants in the scheme.
During the same period, Field became aware that confidential information relating to the company’s business was doing the rounds in the financial sector. A private investigator was called to scan their offices for surveillance equipment. A bugging device was found in Field’s office. He couldn’t find the culprit and had to be careful about what he said in the office.
Following months of negotiations with Investec, a deal was reached in July 2005. Field gave up R150 million ($21.8 million) to Investec. They agreed that it was the end of the bridging finance and also agreed to withdraw their request for FedBond to go under curatorship.
Investec was off his back, the remaining challenge was to get rid of FSB’s application for curatorship.
After numerous bad days, it wasn’t becoming any easier. At every court appearance there seemed to be a postponement. While Field was fighting FSB, his business was suffering. He attended another court hearing in October 2005, but judgment was reserved until December 2005. FSB’s application was dismissed.
Early in 2006, Field’s lawyers requested permission for FedBond to take in new investments from the public, but FSB refused. Without the funds, Field would not be able to make capital repayments.
Following a meeting with Field and FSB, a new monitor was appointed in November of the same year. He would do the same job as his predecessor. The back and forth between FSB and FedBdond would continue for nearly four years, meanwhile FedBond was losing money and clients. Of the 15,000 FedBond participants, 12,000 remained. Around R70 million ($9.3 million) was paid out to those who left.
“We had people ask us for their money. We repaid them and then a week or a month later they put the money back into the scheme. They just wanted to know if we had sufficient money to do that capital repayment. And we did. Every single cent,” says Field.
By June 2007, the company was still unable to accept new funds. Field approached FSB, but without success. Two months later, two weeks before an appearance at the Supreme Court, where an appeal was to be heard, FSB requested a meeting with Field.
FSB was thinking of withdrawing the appeal. It was reported in newspapers that the minister of finance intervened, because it was not in FSB’s interest to continue depleting their budget indefinitely in the pursuit of an application for curatorship that was going nowhere.
Once the dust settled, three months later, FSB granted FedBond permission to take in new funds and continue its activities. Though, it was not easy for Field to kick start the company. By the end of October 2007, after four years, seven court hearings and court appeals, his company had lost around R400 million ($57.8 million) worth of investments. The company’s reputation was damaged, but Field and his team worked hard to win back trust and survive.

Lawyers, Bugs And Trouble

Ran Neu-Ner was looking forward to the day at his technology start-up company, Wealth Maker. When he arrived he found the doors locked and a sheriff’s note declaring the company investor’s bankruptcy.
Eleven years later, Neu-Ner, 36, is the Group CEO of South Africa’s leading activations agency—The Creative Counsel (TCC). The company makes an annual turnover of R500 million ($57 million) and has 650 permanent employees around the country.
On any given weekend 15,000 promoters can be seen promoting some of TCC’s clients’ products. With a 50% market share of the promotions space, the company is not doing too badly. But the picture was not always so rosy.
<div id="attachment_1569" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1569" class="size-medium wp-image-1569" src="/wp-content/uploads/2017/04/424-37-300x200.jpg" alt="" width="300" height="200" />Co-founder &amp; joint-CEO of The Creative Counsel, Ran Neu-Ner; Johannesburg, 22 November 2012 &#8211; Photo by Brett Eloff.</div>
“We lost everything in an IT venture during the dot com bubble. It was supposed to be South Africa’s first online stock trader website. Our investor went insolvent and we shared the same building. The sheriff came and locked us out. I had invested everything; my business partner, Gil Oved, had invested everything,” Neu-Ner says.
After arriving at the office that fateful day, Neu-Ner summoned his business partner to a coffee shop in nearby Norwood.
“We wrote on a serviette all the things we had. We worked out that we needed to pay everyone who worked for us in the IT business. We paid our staff salaries and then we were jobless and hopeless,” he says.
At the time the two entrepreneurs were 25 years old and everyone around them was making a bit of money as employees in the corporate world. However, neither of the two was willing to look for a job.
Neu-Ner credits his business partner and co-Group CEO, Gil Oved, for sticking it out during those dark days.
“There is nothing worse than not having direction, an income or job. You lose all your confidence and self-worth. When I didn’t believe, he pushed me. When he didn’t believe in himself, I pushed him. That is what is good about having a partner,” he says.
The partners go way back, when they met in grade 10.
“We started our first entrepreneurial business in matric selling make-up kits imported from China to pharmacies and hair salons. Literally, going from door to door. We set up a company called Still Thinking so that when people asked us what the name of our company was we would say, Well, we’re still thinking’. It was a great conversation starter,” says Oved.
After six months of doing nothing, the two came across an opportunity in the promotions space. They had no plans to make it a long-term business. They just wanted something to keep them busy. They needed R100,000 ($11,000) to get started but there was no money lying around. Oved took a job as a computer consultant and the money he made he gave to Neu-Ner to start the promotions company.
“The first six months were the continuation of the worst period of my life,” says Neu-Ner.
The two business partners took to “cold-calling” companies in the yellow pages telephone directory. And then one day, it looked like their luck was about to change for the better.
“I cold-called Danone, by luck the company that did their in-store promotions had closed down.”
The requirements from the dairy and dessert producer’s marketing team were high and included the instruction, “Never break the cold chain and execute with the highest standards of execution and creativity”.
Unfortunately, they were up against more established companies, who also wanted the account.
“I created a PowerPoint presentation and arrived to present it. Once I got there, the agency before me walked out and there were five of them carrying briefcases. In that moment I just decided to ignore the PowerPoint presentation and speak from the heart,” says Neu-Ner.
Neu-Ner’s moving speech won them their first big client. The two had to promote Danone’s products at 12 stores, simultaneously, and came out with flying colors. However, challenges still lay ahead.
“One of the promoters on the first day decided to steal from the stores on my first show piece.”
Luckily, this was only a small glitch. Neu-Ner—who has been an entrepreneur since a young age, when he sold cut-out calendar photos in an Israeli neighborhood before he moved to South Africa with his engineer parents—had arrived. He managed to put things right with his entrepreneurial flair.
“I was always an entrepreneur. I had many ventures when I left matric. I didn’t spend too much time at university. I studied and finished my degree [he has a finance degree] but I was never there. I love business,” he says.
Oved agrees that his partner has always been a driven individual and offers some light-hearted criticism.
“This means he accepts brilliance or nothing from himself and all those around him. People who work with him get swept away and are therefore willing to sacrifice and give their all to him. Sometimes his uncompromising nature is hard. Some people struggle to accept such toughness,” he says.
TCC has been rolling out its expansion program over the last couple of years; they bought 50% of the well-known Mr Delivery franchise, which home delivers food from restaurants and fast-food chains. The delivery business is one of many subsidiaries falling under the TCC umbrella, such as the events companies, Minanawe and PopiMedia, a social media specialist.
While the company has grown beyond what the two could have hoped for in the early days of 2001, the partners want to expand even further.
“We are using South Africa as a springboard for the next step, which is how to get into Africa,” says Neu-Ner.
“We also believe that unlike the days of the past where everything started with a TV ad; in the future concepts will become agnostic of medium. The start would often be in activations where consumers interact with the brand on a personal basis and mediums such as TV, radio and others will be support functions,” adds Oved.
The two have traveled a long road to becoming a major promotions company in South Africa and have picked up a couple of lessons along the way.
“It is important to make mistakes because you learn much, much more from your mistakes than from your successes. If you are a real entrepreneur by blood, don’t give up. What separates the men from the boys is those who carry on even when it is looking bleak,” says Neu-Ner.
And that’s exactly why they made it.

Jobless Hopeless Zero Confidence

Gina Din Kariuki was not what you would call a bright student.
Teachers mocked her from Nanyuki, a tiny red-soil township in central Kenya where she went to primary school, to the London School of Journalism.
“I wasn’t very clever. I had negative reports, and I was at times told I was wasting my time in school,” she says.
Gina Din—as she is known in Kenya—hauled this baggage, heavy with low self-esteem, into her first job as a communications manager at Barclays Bank Kenya in 1985. Yet, that job turned out to be Gina Din’s epiphany, catapulting a below-average student to the top of Kenya’s public relations and corporate communications class.
As her role at the bank expanded over a 14-year period, so did her obsession with the job.
Like a meticulous chess player, Gina Din planned her exit years before.
“It wasn’t really challenging as it was the same old thing. I even set up the bank’s CSR agenda through a community relations department, which was replicated in the whole of Africa. I had no interest in it but I found myself enjoying it very much,” she says.
Blue-chip companies in Kenya, such as Kenya Airways, Kenya Commercial Bank (KCB) and East African Breweries (EABL), were keen to recreate what Kariuki had done at Barclays.
“I became a generic term because these corporates were looking for a Gina Din. That made me realize I can replicate what I did for Barclays, but I really didn’t want to go to another company because it would be the same thing. I had been building a brand without realizing it. When I stepped out I had a name and brand that stood for something,” she says.
She set up Gina Din Corporate Communications, a promising public relations outfit that would be courted by global companies. Interestingly, her first client as an entrepreneur, on October 1, 1997, was the employer she had just ditched and from which she poached four of her colleagues. A year later, she won over South African Breweries, which was entering the Kenyan market, followed two years later with Safaricom, then a struggling start-up without an office.
Gina Din was on a roll, amassing clients as the PR market grew in Kenya. Four staff grew to 15 in five years.
Over the last decade, Gina Din has been a mean closing machine. At one time, she enjoyed the lion’s share of blue-chip accounts, including national carrier Kenya Airways, leading mobile operator Safaricom, Kenya’s biggest bank in terms of geographical distribution KCB and LG Electronics.
But this unassailable position has waned over the last few years forcing Gina Din, a feisty dealmaker with a penchant for showbiz, to rethink her strategy. She has lost the big-dollar accounts, including Safaricom, which she held for 10 years, KCB, and Kenya Airways.
The losses have been a big blow to Gina Din. Many in the industry were writing her epitaph. But she claims—in a bit of ambitious PR—that the loss of business was strategic, even though the huge Safaricom loss sparked speculation.
“I had to take the backstage to consolidate business without them (Safaricom), because if we continued with them they would have been every part of the decisions we made. In terms of staff we had lots of people on the Safaricom account. It did not make business sense,” she says.
Gina Din argues that she actually walked away from the most profitable company in the region and the highest-paying client, to save her business. Still, it was her worst day as an entrepreneur.
“I wanted to do other things. We didn’t walk out in totality; we still do government work for Safaricom. It was very amicable. Our other clients were complaining because we were so Safaricom. It didn’t seem that there was enough space for anybody else,” she says.
“It was a strategic decision. I didn’t want my brand to be identified with one client. It was tough financially, but it was necessary to take a year off making huge amounts of money to rebuild the business.”
Part of this consolidation strategy, or what others see as a comeback plan, is a partnership with big brands in the industry. Recently, Gina Din, with a personal fortune estimated at more than $5 million, entered into an affiliation partnership with Weber Shandwick, one of the world’s leading public relations firms, to anchor expansion into the African market. Africa is the strongest of emerging markets, with a growing population and middle-class attracting multinationals.
“We had requests from many firms to partner with or even buy us out. We searched and vetted and agonized, and found we had chemistry with Weber.”
The show-stopper in Gina Din’s revival was the October 2013 marriage with a rival Kenyan company after six months of secret courtship. The transaction involved a share swap with IMAGINE, a mid-level marketing and communications firm in Kenya, strong in one aspect that Gina Din lacked: creative marketing.
The firm was rebranded to Gina Din Group to consummate the union and has launched an ambitious five-year strategy that seeks, among others, to have a presence in West Africa. Now Gina Din, which already serves Camac Energy in West Africa, can boast a significant presence in the region, thanks to IMAGINE’s clients, such as Vodacom in Tanzania and Heineken.
“Traditional PR no longer works. Clients want a one-stop shop. I know PR and nothing else and so I had to get someone with a background in marketing and creative. Also, the average CEO in Kenya today is 40 years old. The workers need someone of their age group to take the brand to the next level so I can focus on business development.”
The shift in gear comes with a change in its offering. Gina Din says the group is now focused on providing strategic communication solutions.
“I don’t want to be your average PR company putting up banners at events. I want to provide and shape discussion. We are shaking up the industry. I want to change the business from the event organizer thing. There is space for those who want to do that. I want to be a consultant and I want to offer strategic guidance and counsel in the league of Deloitte or PwC. I’m not really keen on golf competitions. We have taken some shocks because of this decision. I am confident this will lift my brand to the next level.”
Dismas Mokua, who worked for Gina Din for five years as a media director, says the company has the capacity to bounce back given the founder’s extensive connections and lobbying prowess.
“I think she started developing interests outside her core strength of political lobbying and that diverted her attention. She can come back as her political connections are still intact and now she has built systems to run the business. Gina knows how to open doors and she’s charming,” said Mokua, who is vice-president of Sadiki East Africa, a political advisory firm based in Nairobi.
Gina Din emphasizes that she is not ready for a buyout yet, but to grow the brand further.
“I have reached the point in life where it’s not about money. I am transitioning from being successful to significant, and going across Africa is part of the new direction. As we speak, we are helping (the United States International University) USIU-Kenya to build a public relations curriculum,” she says.
Looking back, she relishes her journey in PR which has deepened her understanding of societal issues. She spearheaded the Kenyans for Kenya campaign in July 2011 to feed starving people, which raised KSh700 million ($7.9 million). Now she is the Kenya Red Cross goodwill ambassador.
The last born in a family of four sisters, and a mother of two, Gina Din turns heads with her flamboyant lifestyle and dress.
“I love being a woman and owning that space. I love to dress and I don’t do it for anybody else. If a guy can be manipulated by how you are looking, what kind of guy is that? It’s really sad. I love being feminine.”
For this, Gina Din has been a target for gossip. One of the most hurtful was about her coziness with former Safaricom CEO, Michael Joseph. Talk resurfaced when Safaricom engaged a different PR agency just two years after Joseph’s term expired.
“I am so used to that; I have developed a thick skin. At Barclays, whenever a woman got promoted you’d hear stories. We had a very turbulent relationship with Michael. If anything, we would fight like crazy; we would challenge each other and it was intellectually stimulating. We were never good friends until after six years. It took hard work to get that respect from Michael,” she says.
It is this defiance, in an unforgiving business that has seen her rise, fall and rise again. Gina Din says she has learnt from her mistakes, for instance, holding onto the business for too long at the expense of professional management. She rues that she didn’t hire more staff earlier on.
“You have this founder thing that I have to nurture this baby. But it’s never too late, we are there now. Two or three minds are better than one.”
She also made mistakes in under-pricing her services in a market with high overheads. She was excited to get business, she says, and cared less about payment. At some point Gina Din had 40 clients, but was subsidizing some.
“I have become much more of a businesswoman in the last three years. I was following my passion blindly; it didn’t matter whether I made money. Women lead from the heart and at times we do things because we love to do them. Sometimes you take steps and ask if they make sense. But, a time comes when you can’t do everything you want to do. I ran my business as if it was a foundation.”
Gina Din has had many worst days in her business, but the Kenya Airways Doula crash in May 2007, which killed all 114 on board, hurt her as she presented the airline’s message to the people.
“The communication support I gave KQ changed me as a person. It made me realize how fragile life is. My hubby is a pilot with KQ and it could have been him. I also realized how crisis communication is important. From then, we started insisting our clients prepare for crisis communication. There’s no point building the ark after hearing the thunder.”
You can be sure, in business, Gina Din, will have hammer and nails in hand long before the sky turns dark.

What Gina Din Next?

March 19, 2010. It was a joyful Friday night in Robertson in South Africa’s Western Cape. Wedding guests drove through the cool breeze of a warm night on their way back from a cruise on the river and everyone was merry. The piercing sound of a cellphone stopped the joy in its tracks.
“I just knew there was something wrong,” says Carl Bates.
“I always knew I would get a phone call from New Zealand late at night. This was at 10:15 on a Friday night. I always thought it was going to tell me that one of my grandparents had passed away.”
The voice on the other end of the line told Bates the bad news: his father had suffered a stroke back home in Wanganui in New Zealand and couldn’t speak or use the right side of his body. It was the prelude to a worst day that would tear at the heart of the Bates Family.
“I knew what this would mean for me: wealth destruction, business destruction and family destruction.”
It was a story rooted in rural Wanganui. The Bates family was known for its entrepreneurs in the small town, population 45,000, where the Wanganui River flows into the sea on the west coast of New Zealand’s North Island. Between them they ran a butcher’s shop, a greengrocer’s, a bicycle shop, a florist and a concrete plant.
“They were all small businesses. I was wondering why have none of these businesses made a whole lot of money? What is stopping them succeed? This whole learning and thinking was going on in my brain,” says Bates.
One of the biggest fish in Wanganui was Mike Bates, the father of Carl, who ran a plumbing; property; plant and vehicle hire business.
“I was born on March 13, 1983; dad’s business was incorporated on August 15, 1983. I had grown up with the business. I had learned about the business and watched it grow; I had watched the trials and tribulations, like when his secretary had stolen his money from him and when builders had gone bankrupt and we had not been paid,” says Bates.
“My dad was fun loving, carefree, a little bit unreliable but he was clever. He was determined and stubborn and he was a winner. People knew who he was; he wasn’t in everyone’s good books. He was fit and went to the gym and had played international roller hockey for New Zealand. He was only 51 when he suffered the stroke.”
Sadly, for Bates junior, in the years leading up to the tragedy, he had struggled to talk to his father of the dangers of building a business around one person. Ironically, passing on this message to entrepreneurs around the world was the core of his business. In his late 20s, Bates built up a R10 million-a-year ($1.16 million) business, Sirdar, which he expanded to South Africa in 2008 after a chance meeting over breakfast in Hong Kong. The business specializes in coaching entrepreneurs through independent non-executive directors assigned by the company.
Bates, who entered Massey University, Palmerston North, aged 16, had a claim to being a wunderkind of Wanganui. He studied accountancy and finance, while working full-time at McDonald’s. At 17, he was elected chairman in Palmerston North for the Young National Party; at 18, he became a director of a private hospital in the city; at 20, he was a director of Arena Manawatu—the largest multi-stadium complex in New Zealand.
Little in life could have prepared Bates for the ordeal he was to suffer on March 26, 2010, as he sat in South Africa and agonized over his father’s business.
“I was the power of attorney, along with the family lawyer, while everyone agreed that this decision to liquidate his business had to be made, I knew dad would blame me,” says Bates.
“On March 26, 2010, I made the single hardest decision of my life. I assigned the resolution that put my dad’s business into voluntary liquidation. It involved 30-odd staff; some of whom had been with dad for 30 years. My granddad, Ken, a greengrocer and part-time magician, who has just won a lifetime award at the New Zealand Magic Convention, had to talk me through signing the bit of paper. He was on the phone from Wanganui coaching me, though it was late at night. What it meant was that 30 years of business had gone. It couldn’t have carried on, the business was all built around my dad and the minute you took him out, it didn’t work. Most small-business people do this. My brother worked in the business and he said he didn’t want to take it over in the middle of the building depression.”
The signing of the paper was not the beginning of the end, to borrow words from Winston Churchill, but maybe the end of the beginning.
“The bank jumped all over the problem, they froze accounts, called in mortgages and what they did to my dad’s property company was send it under and all the businesses followed. To save the family, my mum and I took over some R6.5 million ($757,000) of debt on property assets. The value of the assets and the value of the property left us with negative value. We were drained trying to hold it all together. I used to get up at 4am bleary eyed, in South Africa, to negotiate with the banks and key creditors,” says Bates.
The rift between father and son proved just as complicated and even more heart rending.
“In an instant the hierarchy of our family was turned upside down. I was gutted, I knew dad would hold it against me, which he did. He literally didn’t communicate with me for six months. He can’t talk but he can communicate.”
Clearing up the financial mess by realizing family assets, triggered even more pain.
“A trespass notice was served on him to get out of the house in December 2011 while we were still dealing with tidying up the mess. One of the things we had to do was sell the house he lived in… He decided he didn’t want it sold and he barricaded himself in and got someone to change the locks to stop us getting the building inspector in to do the final inspection. We had a cash offer on the table, but couldn’t sell. Dad had another mini stroke while he was driving to buy some food. While he was in hospital we had to sell the place, then he didn’t communicate with me for another six months.”
As the Bates family balanced the books and licked its wounds slowly, very slowly, the sun peeped through the clouds over Wanganui.
“Out of every hardship comes opportunity. I think for my father it was a release from something that could have killed him. Dad’s stroke was the basis for a book I wrote called The Laws Of Extreme Business Success, I knew dad’s business had some problems, I wanted to show him the way he could make it a sustainable business. Ironically, he had the stroke and his businesses has gone and now I am travelling the world telling business people like him what they can do to create a sustainable business, moving from being a craftsman to being entrepreneurs. Now, he spends his time doing what he always wanted, he doesn’t have to work, he has no financial pressure and spends his time sketching, painting and recovering. He is exercising every day and slowly getting movement back. He is a case study for Auckland University on stroke recovery.”
Even so, the family feud was not quite over.
“I went home to New Zealand in August 2012. When I went to his house he tried to close the door on me and if my grandmother wasn’t there he wouldn’t have let me in. Then after two minutes in the house he made us go and then his social worker asked me to come back next day. That started us talking and when I came back to South Africa he started skyping me,” says Bates.
“I use this story as an example. I talk about my dad and I think about him all the time.”
Finally, father and son appear on the road to healing the wounds of their worst day.

A Tale Of Sorrow And Salvation

You say your prayers when your kingdom comes crashing down but do you survive to tell the tale?
This is the story of 46-year-old Nigel Chanakira, one of the first black Africans to own and run a bank in Zimbabwe. He was only in his 20s in 1994 when he opened Kingdom Bank and Kingdom Financial Holdings. He beat the odds of an uncertain political and financial environment to make it happen. But the company has been as much his success story as it has been his worst nightmare.
Chanakira says:  “I had worked in white organizations. I worked in an Anglo [American] subsidiary and I was the second black investment analyst in Zimbabwe. That is where I cut my teeth and learnt about financial markets.”
Chanakira was also among the first group of black children to go to former whites-only schools in the early 1980s.
“That was an experience of its own. I was very vocal about racism. I showed them that you can co-exist as black and white,” he says.
Working for finance house Bard after school, he learnt to trade government bonds. He also came up against racist drivel like the notion that blacks could not be investment analysts.
“It was still a time when professionally things were quite racial. I proved them wrong because I became one of the finest investment analysts in the industry,” says Chanakira with a mock British accent.
But what drove him into setting up his bank was his passion for economics. He jokes that TV programs about the lifestyles of the rich and famous, showed that the biggest bling belonged to lawyers and bankers. This also sparked his interest.
Having already made a mark in the heart of the financial district in Zimbabwe, the 26-year-old knew he could take the next leap. He started by making the bold offer to buy and lead Bard. That was rejected. He then sought a licence to start a bank. And just like that Kingdom Bank was born.
“The idea of Kingdom as the name for the bank was born out of Matthew 6 verse 33: “Seek ye first the kingdom of God and his righteousness and all these things shall be added unto you,” quotes Chanakira, who is cut from Pentecostal cloth and peppers his speak with biblical quotes.
Kingdom became the second bank to be listed on the local bourse. USAid sponsored him on a visit to the States. The aim of the visit was to expose him to how global financial markets work and to give him insights into how the New York Stock Exchange (NYSE) operates. The ultimate dream for Chanakira was to have Kingdom listed in the Big Apple one day.
By 2007, Kingdom Financial Holdings merged with Meikles Hotel, led by John Moxon, to form the powerful conglomerate, Kingdom Meikles Africa (KMAL). Meikles had been toying around with the idea of getting into a banking deal and looked to Kingdom Bank. The merger was the culmination of lengthy negotiations. It happened because Meikles wanted an empowerment partner and a bank to be part of his diversified company that included Tanganda Tea Company, Cotton Printer, TM supermarkets and stores as well as KFHL subsidiaries. Chanakira sold 25% of his shares worth, a record of, $260 million.
Chanakira’s merge deal was big news. It got the bourse all shook up and raised the prospects of a listing on the NYSE. The deal was a triumph for Chanakira in a turbulent Zimbabwe market that had seen several local banks collapse under the burden of debts, insider trading, bad loans and corporate malfeasance. At the time, analysts called the KMAL deal ‘a marriage made in heaven.
“The share price went ballistic, it hit the roof,” says Chanakira.
But the happy days would be short-lived. In one year, relations between investors soured after a furor over money invested into the Cape Grace hotel in South Africa. Chanakira was questioned about how the money had been transferred out of Zimbabwe without his knowledge and investors demanded that the money be returned.
Soon the marriage became acrimonious and the fallout, public and nasty. The demerger between Kingdom Financial Holdings and Meikles Africa followed. Shareholders agreed to demerge KFHL from Meikles on the condition that Chanakira pay Meikles around $23 million by 2010, to regain control of KFHL.
The fallout had all the ingredients of a soap opera. Chanakira admits that the manner in which his worst day played out was full of drama that only Hollywood could have improved.
Chanakira remembers it well. It was September 2010 and he had just landed at O.R. Tambo airport in Johannesburg en route to China for the World Economic Forum meeting. His reputation intact, he had been invited to be part of a global team of young, African entrepreneurs who would debate current world business trends.
As he was checking in and clearing customs, it didn’t occur to him that his KMAL partner, Moxon, wanted him out. Chanakira says it was exactly like a typical African coup d’état. The takeover was swift and stealthy, as they executed the plan while the leader was away on official business.
“I went to the airport with a ticket to China, but I ended up flying back to Harare. Just imagine, you are about to fly out to the World Economic Forum, as a young global leader, then you receive a report of a circular, informing you you’ve been fired. John Moxon, chairman of Meikles Africa, issued a letter firing me and instructing me to leave the company. I was fired via circular sent to the market,” says Chanakira.
It was the ultimate humiliation. He was hurt, irritated and drained of energy.
In that instant, it mattered little to Chanakira that he had won numerous management awards in Zimbabwe and had been named among the greatest entrepreneurs on the continent. All the hurdles he had to overcome to form Kingdom bank and to cement the deal with Meikles, seemed in vain.
“I had sold my house to start that bank and went back to stay at my father’s house,” he says.
He adds: “We built Kingdom and expanded to Malawi, South Africa and Botswana.”
But there was no time for self-pity. Once he touched down at the airport, he began to initiate a plan to reclaim his business. His plan was to rope in political empowerment groups that would fight in his corner. When ZANU-PF party officials, loyal to President Robert Mugabe, got wind of the KMAL debacle they were hopping mad. They were not about to let one of their ‘success’ stories, which was part of the government’s indigenous empowerment strategy, be gobbled up and spat out by white business.
Even though Chanakira instituted legal proceedings, it was politics that prevailed as Chanakira called in political favors. Zimbabwean media has continued to take a dim view of Chanakira’s use of politics to handle his business affairs. Moxon eventually fled to South Africa after been specified by government for allegedly “externalizing” foreign currency.
“The demerger was a very complex transaction; it had undertones and overtones of complicated business dealings, political interference, race, even greed. The political overtones were dominant,” says Dumisani Muleya, editor of The Zimbabwe Independent.
“Chanakira had his connections behind him, pro-black economic empowerment business people, your Philip Chiyangwa, Themba Mliswa, the affirmative action proponents. Moxon marshaled some political support. He also had very strong political connections. You have to see who he was working with. He was working with Farai Rwodzi, who is well connected politically. Rwodzi had the backing of the late Retired General Solomon Mujuru. That’s the nature of business in Zimbabwe,” says Muleya.
For Chanakira, it’s been about clawing back from financial disaster to rebuild his reputation.
“I have developed friendships out of the crisis. It was very difficult. When I was still at Meikles, I had hair then—it went gray in those two years,” he says, with a chuckle.
Doing business in Zimbabwe remains an unpredictable environment where policy inconsistencies agitate both domestic and foreign investors.
He says of Zimbabwe’s indigenization program: “I think indigenization, as an empowerment tool, is a great concept. Empowerment is needed, let nobody lie to us. I can’t start a bank in the US. You can’t start a TV station [or] media. There are certain industries that are guarded in the US.”
But he adds: “The policy is too strong for the season and if you bludgeon people, if you bulldoze them, it doesn’t work.”
The program driven by indigenization minister, Saviour Kasukuwere, is a real threat. Plans are for foreign banks to give up half their stake to Zimbabweans under the controversial Indigenization and Economic Empowerment Act. Already Standard Chartered, Barclays and Stanbic are in the firing line and stand to have their licences revoked.
Zimbabwe’s central bank has warned of turmoil in the financial sector, should some of these proposed government drives take place. Central bank governor, Gideon Gono, says: “There is no law that provides for arbitrariness on the part of anyone and or expropriation of banking assets in Zimbabwe yesterday, today or tomorrow.”
However, the invitation stands for Zimbabweans to come forward to start banks. Chanakira would agree, even with the rollercoaster ride he’s had. You can’t keep him from business and you can’t keep him from giving thanks in the prayer room he has in his home.
“I grew up in a very strong business family. I had a rich business culture.”
He warns about due diligence and about choosing business partners carefully.
“Kingdom is a legacy, how do you sell it for a bowl of soup, I just can’t do [that],” he says.
Chanakira lives in a posh Harare suburb today. He points to the stairs in his mansion.
“I have a prayer room upstairs; I went there to pray every day. It was three difficult years. It took nearly three years for the fight and to survive after the demerger. That was God’s intervention.”
Chanakira is still passionate about listing Kingdom on the NYSE and says it’s still a possibility.
“Absolutely, it will happen! It’s a journey. I guess we probably need another five years to get there. Africa is too rich to be poor and I want to be one of the world changers,” he says.
Kingdom Bank now has new investor on board, namely Africa Asia Bank.
Only a few months ago, Kingdom Bank was dogged by reports that they had to send clients home without cash, allegedly because the bank simply didn’t have money. Chanakira said, at the time that it was just a small hiccup and they were not having cash flow problems.
Chanakira says there’s no stopping him and that he still has a lot of his story to tell.
“I am not only going to write a book, but I’m going to make a movie. Dallas will have nothing on my story,” he says.

My Kingdom For  A Second Chance

William Duk had every reason to be pleased with himself as he strolled along the lovely, long pristine beach at St Lucia in South Africa’s KwaZulu-Natal province. He had celebrated the spectacular turnaround of his once-doomed business, by hiring a hotel, inviting 110 guests and marrying his bride, Briggie, in wild and convivial weekend in Umzumbe on the
south coast.
“We had a record sales month in April and I thought, ‘Great, I can I get married and have a honeymoon in peace,” says Duk.
“It was a nightmare. The honeymoon, wasn’t really a honeymoon.”
As the scores of guests clinked glasses in a final farewell at the hotel in Umzumbe, on the south coast of KwaZulu-Natal, little did Duk know that tens of thousands of transport workers in ports and depots across South Africa were going on strike for more pay. For thousands of business people like Duk, who rely on imported materials, this was going to prove a cut to the jugular.
It had been a short career as an entrepreneur for Duk, who had graduated in accounting from the University of Cape Town in 1999. He left to cut his teeth in the one of the world’s liveliest financial markets.
“I went to London for two years to work with South Africans, Kiwis and Australians in banking at Lloyds and the Royal Bank of Scotland (RBS). We were all on contract and partying every night, you had to have a South African passport to get into Fulham and Putney in those days. On bank holidays we would spend five hours in traffic just to get to the M25,” he says.
“At the end of the two-year holiday visa I was marched out of RBS—they had a change of human resources and they said I had worked longer than my time. On these holiday visas you are only meant to work 50% of your time in your chosen profession. So, I got a part-time contract in a small technology services company. I was meant to leave the country after that, but my new employers convinced me to stay for another six months and then another six months and then I rolled out four- and-a-half years later. That time was pivotal; the London business was going into Europe, employing 200 people, and I was financial director. I was opening offices in Madrid and Paris for voice and data services like PABX and call centers.”
Duk flew home to Cape Town in 2006, with a pocket full of pounds, determined to invest in his future. He had always wanted to be an entrepreneur, like his father and grandfather, this was his chance and in many ways it bore out the Chinese proverb: Be careful what you wish for.
It all began with an investment in property. Duk went to Atlantis, a small town a short drive from Cape Town, to buy a factory from the Plantation Shutter Company, which made wooden louvered shutters for windows out of rare imported hardwood. The company was going into liquidation.
“I bought the building and spent the next few weeks looking for a tenant. I got a phone call from the silent partner, who I bought the building from, he said he was coming to Cape Town and wanted to meet. I looked through the financial information he showed me and thought this shouldn’t have happened. Working in a European company, you know how much working capital can be stretched. It was down to mismanagement, more than fundamental problems with the business,” says Duk.
“I bought in for a rand and took over the debts and liabilities. I didn’t have any cash—that was all tied up in property—I used the cash I had paid into the business for the building to finance a rescue plan. This was February 27, 2006: the doors of the business had been closed; 40 people hadn’t been paid for three months; suppliers were in the courts trying to get their money; there were 49 clients who had paid 50% of their deposit and expected their shutters to be installed before last Christmas. The business was a million rand in debt. It was as bad as it can get.”
It got worse from day one, as Duk tried to salvage what he could amid angry customers. He needed every ounce of his affable nature.
“My first job was phoning my clients and saying, ‘Hi, I am William from the Plantation Shutter company’ and they were saying, ‘Have you got our lawyers letters?’ I calmed them down and said, ‘Let me explain.’”
Duk was encouraged by the fact that 39 clients still wanted shutters, even though they had already waited for five months. It took nearly six months to placate the angry 39 and fulfil their orders. It took 18 months to turn around the business and by April it was selling a 1,000 sets of shutters-a-month and turning more than R40 million-a-year ($4.6 million). It was a dramatic turnaround that helped Duk win the Sanlam Business Partners Entrepreneur of the Year Award for 2012.
So Duk could be forgiven for feeling replete as he walked on the beach in St Lucia, on his honeymoon, on a sunny May afternoon. This warm feeling evaporated in a heartbeat as the strike by tens of thousands of dock and transport workers, in support of a 15% pay rise, hit home.
“I got an SMS saying we have got a problem with our timber supply,” says Duk.
In many ways, timber was the Achilles’ heel of the business. The shutters have to be made from durable Obeche hardwood, that will not warp, from the forests of Ghana. It has to be shipped from Accra to Cape Town and then transported by truck to Atlantis. In 2010, this supply line proved highly vulnerable in the face of a strike that was to cost South African business an estimated R7 billion ($803 million).
The upshot was that the factory in Atlantis ran out of wood and angry customers once again lurked in the wings. So, Duk was on the phone, on the beach, day in day out, in a frantic bid to keep the wheels of his business turning.
“So, it was all about buying time and putting a plan in place. If we were a smaller company we could have gone down the road to buy, but we were no longer a small company. We were consuming 320,000 kilograms of timber a year. I spent the entire day phoning timber merchants and suddenly the price had gone up 25%. I ended up negotiating with a few of these, but we couldn’t get enough, soon enough. We are a 21-day turn around operation. I ended up trying to juggle production and speaking to my clients around the country. I spent the entire day on the phone trying to put a plan in place. The worst moment of that day was realizing that everything we had worked for to restore credibility, in an industry not well known for its reliability, was at risk. We couldn’t afford to make excuses. For us it was going out and getting whatever timber we could at the best prices, paying 20% more than usual,” says Duk.
To make matters worse the supply of wood that Duk needed so badly was so near, yet so far. As the strike wore on, three 40-foot containers of hardwood from Ghana bobbed in Cape Town harbor, with no one to unload it. An email from the clearing agent said it all.
“Wait, hope and pray…. Here’s hoping the comedy of errors turns into that romantic comedy with a happy ending,” says the email.
The strike ended on May 27, 2010 but that wasn’t the end of the troubles for Duk and his timber. There was a scramble to see which of the tied-up freighters was to be unloaded first on the docks of Cape Town, as frustrated customers gathered on land. Duk says the problem was that the clearing agent didn’t have the captains’s cellphone number, so there were more delays as he had to wait for information through the shipping line.
“It went from bad to worse, the strike broke on the 27th and then we had to wait another two or three days for our containers to arrive on land,” says Duk.
“After two-and-a-half weeks of uncertainty. It was absolute relief. The ball was now in our court so we could put a plan in place….”
Duk took his wife to their favorite restaurant that night, a little older and wiser than they had been when they married just a few weeks before, after the strike that could have pulled down the shutters on his business.

Wait, Hope And Pray: How A Strike Can Ruin Your Honeymoon

Argyropoulos was used to the vagaries of the luxury cruise business that had made him his fortune. Born in Athens, in 1962, the son of an engineer, Argyropoulos spent his life working in the luxury cruise business, including a spell in New York.
In 1991, came an assignment that was to change his life. The Greek cruise line employing Argyropoulos sent him to South Africa in search of new business. It proved an eye-opener for Argyropoulos and he saw a South Africa on the cusp of freedom where the shackles of uncertainty and sanctions were about to be cast aside. The country was about to be a booming emerging market full of people with money to spend, who wanted cruises, but didn’t know where to buy them.
Argyropoulos smelt cash and within a year had told his employers, politely, that he was setting up on his own. From a desk and a telephone in the corner of a Johannesburg office, Cruises International was born. His nose for business didn’t let him down and more than 20 years later he employs 20 people and turns over more than $17 million by sending Africans around the world on the finest ships.
On April 17, 2010, Argyropoulos had every reason to be pleased with himself. Business was bearing up, despite the recession, and he had just packed off 60 employees of a big South African pharmaceutical company on a dream cruise to Croatia and the Greek Islands—a break on the blue Mediterranean, in the gentle spring sunshine. It was even more pleasing for Argyropoulos that this cruise was a reward for people, like himself, who had beaten the recession by exceeding their targets. The tour group was to fly from Johannesburg to Istanbul, in Turkey, then on to Venice for a few days of cruising in the sun to the clink of ice over cocktails in frosted glasses. Even the name of the ship sounded promising: Splendor of the Seas.
Over this happiness loomed a dark, swirling, ash cloud.
Argyropoulos was sipping coffee quietly in the Johannesburg suburbs and making plans for the weekend when the telephone rang.
“Turkish airlines can’t land in Venice because of the ash cloud,” said the tour operator bluntly from Istanbul.
“We are now hiring a bus to drive through to Venice.”
This was a journey-and-a-half to Italy, via the Balkans, that would take 20 hours.
“At that moment I was quite calm, until I heard it was going to take 20 hours.”
Argyropoulos worked it out that by the time the group drove into Venice the cruise ship would have left. He phoned the group and told them to head for Dubrovnik, in Croatia, instead so they could meet the ship on Sunday night. That was that, he thought.
Then, at the crack of dawn on Sunday morning, Argyropoulos woke, with a start, and unable to sleep, went check his e-mails. To his horror, he saw that the Splendor of the Seas wasn’t going to Dubrovnik, the very place he had directed the unlucky 60 from Johannesburg. It turned out the cruise ship had waited in Venice for its missing passengers and ironically was going to skip Dubrovnik to make up time.
“So after 11 hours on a plane and 20 hours on a bus, with a driver who doesn’t speak English, they were going to miss the boat anyway. I had to inform the tour leader,” he replied, with something that you would find very difficult to print in this article.
“Now, this was a cruise that was supposed to be a thank you for working hard throughout the year. Now, here you had people [who had done] more than 30 hours of travelling, who were sweaty, dirty and uncomfortable, upset, anxious and angry.”
The only course of action was to send the bus back the way it came. The next chance of catching the Splendor of the Seas was in Corfu.
“I contacted my port agent in Dubrovnik on ways to get them to Corfu. I explored the option of chartering a flight and quite quickly this became impossible as they wanted letters of credit needed to hire an aircraft. With the ash cloud there weren’t many planes. The second option, was to charter a ship to sail to Corfu, which is about 12 hours. They would have made it, but we couldn’t find a ship.”
There was nothing for it. The bus had to go back the way it came towards Corfu. Argyropoulos had organized a hotel for the tourists and they were feeling a bit better. Even so, the tour operator waited until everyone was settled on the bus, before he informed them of the grueling journey ahead. It was to be a journey through Montenegro to Albania, then on to Greece and by ferry to Corfu—a trip of more than 11 hours. That was the plan before another setback struck. The bus driver said he had reached his driving limit, stipulated by law, and had to take a rest. The tour operator tried to find a new driver and bus, but, as it was a Sunday, this was impossible. It was decided to wait for the driver to rest, meaning another delay.
While they were waiting, panic went through the 60-strong group over whether everyone had a valid visa for the trip. Luckily, everyone had a Schengen visa in their passport.
“At the very least this was a dim light at the end of the tunnel,” says Argyropoulos.
“They left Dubrovnik at 5pm on the Sunday and at 10pm I had my last communication from the tour leader and she said the roads were very winding and narrow. It was raining, so the speed was about 40 kilometers an hour. Then at 6am on Monday, we tried to get in touch with the bus, unfortunately there was no cellphone reception. Eventually, at 8am in Johannesburg, I had an SMS to say they had crossed the border into Skopje in Macedonia and they would need another eight hours to reach Igoumenitsa to catch the ferry to Corfu.”
“I then calculated their estimated time of arrival in Corfu, which at best would have been five in the afternoon, which again would have been too late because the ship would have left Corfu by then. The ship couldn’t wait because of the cost of port fees, keeping up with schedule and available berths at the docks. I didn’t want to alarm the clients on the bus any further, so I allowed them to reach the border with Greece and once they were through the border I spoke to the people on the bus again and informed them of the situation.”
The tired and frustrated travelers took the bad news with remarkable aplomb.
“At that point, I was informed that the group didn’t want to chase the ship any further and wanted to enjoy the rest of the time in northern Greece. I gave some time to allow them to come to terms with the idea, then I called back and told them they had five days left, so it didn’t make financial sense to stay in northern Greece, where there wasn’t much to do, so I advised them to meet the ship in the next port of call in Santorini,” says Argyropoulos.
They drove to Thessaloniki, in northern Greece, where Argyropoulos had booked them flights on to Athens, luckily Greece had not been affected by the ash cloud. The group spent the night in a hotel at the airport in Athens and next day flew on to Santorini where—finally— they caught up with the Splendor of the Seas. There were four days left and they settled onto the cruise liner for a trip to Venice via Dubrovnik.
“Once they were on the ship they were totally spoiled and the crew went out of their way to do everything from cocktail parties to free laundry. They had a very, very, good time on board ship,” says Argyropoulos.
By the time the cruise ship arrived in Venice the ash cloud was gone and all flew back to Johannesburg.
“The feedback that we got once the group was back was that they understood the situation and as much as it was unpleasant they knew that everyone had tried their best to reunite them with the ship. We had done everything humanly possible.”
The cruise liner gave the group a complete refund for the days missed.
“Earlier this year they contacted to go another cruise!” smiles Argyropoulos.

Ashes To Ashes,  Port To Port

The bad news came down the telephone to the chair queen of Nigeria. Ibukun Awosika, just home from a business trip to Barcelona, sat on her bed in her Lagos home, working on her computer, when the telephone rang on January 7, 2004—her worst day. On this day her furniture business, that had taken years of suffering to build, hung by a thread.
It was a body blow even for an entrepreneur as feisty and resilient as Awosika. To say Awosika is a formidable woman is a bit like saying Usain Bolt can run. Her company turns out 500 chairs-a-week; if you are reading this in an office in West Africa, there is a very good chance you are sitting on one of them.
“I am not frightened of anybody,” she says during our meeting at her luxury home and you can quite believe her.
This tenacity reaches back to her roots in Ibadan, Oyo state, where she was born on December 24, 1962. Her parents, a food technologist and a fashion designer, worked away, so Awosika was brought up by her grandmother, who ran a salt shop. This was where she learned her first lessons in trading, bargaining and being an entrepreneur.
“I actually didn’t grow up wanting to be an entrepreneur. That was never part of the dream. I wanted to be a doctor when I was in secondary school, later on an architect but I eventually ended up in university graduating with my first degree in chemistry. I also took many free electives in accounting as I had a keen interest in banking,” she says.
A banking job took its time to materialize, so Awosika filled her days by working in sales at a furniture company. The job lasted a mere three months, but the passion for the furniture game has lasted a lifetime. Awosika saw a gap and set up her own operation, the first step on the way to a net worth of more than 3 billion naira ($18.6 million).
“It was called Quebees Limited. We started operations in January 1989 with two carpenters, two sprayers and two upholsterers. We worked from the back of my father’s house, then in an incomplete building next to my chief-carpenter’s house, for a while until we were able to find alternative working space… I had no money to start with. The carpenters came with their own tools, I rented the machines we used to spray. All I needed to do, was find my first job. My first job was from a bank to make wooden paper trays, wooden dustbins and computer stands,” she says.
Awosika needed a big contract to establish her business and took the chance of exhibiting at a furniture show where her chairs caught the eye of Texaco Nigeria Ltd, which was looking for a company to furnish its headquarters. To close the deal, Awosika put on her high heels and headed for the Texaco head office in Lagos.
“I walked into the office of the secretary of the chairman of the executive committee of Texaco on the day we had to sign for the contract. The secretary said to me, ‘We’re waiting for the MD of Quebees furniture’ and I responded ‘Yes, that’s me”. She called her boss and said, ‘the MD of Quebees is here”. He walked in, looked at me with a very surprised expression, ‘You are the MD of Quebees?’ he asked. I said, ‘Yes”. He asked: ‘Are you sure you can do this job?’ I responded, ‘Yes, I can,’ she says.
“I had learnt to be confident as I had always received the same reaction from people, being a young lady who was running her business. I noticed he had a business card on his desk with a familiar surname. I immediately asked if he was related to one of my peers back at school. It turned out he was my mate’s father. Doing that job and delivering on it, opened a lot of new doors and opportunities for us.”
Awosika was on a roll and on the way to a dominant position in the market. The final piece in the jigsaw was a deal with French chair manufacturer, Sokoa, a company with a €10 million ($12.3 million) capitalization, to import furniture raw material into West Africa. It made her a fortune until, she received a phone call one night in January 2004, like a bolt from the blue…
“I got a call from the former manager of Guaranty Trust Bank saying that furniture material importation had been banned. I took a breath, paused for a minute, and then said, ‘It is well”. He responded, ‘It is well? How can it be well? They have just shut your business down!’ I responded, ‘I’m sure, God has me covered, one way or the other,’” she says.
Awosika had to think fast. The government was adamant that the ban on furniture material imports—in the interests of stimulating Nigerian industry—was there to stay. For Awosika, to delay was to risk another manufacturer stepping in to take her hard-won customers.
“It was do-or-die for us… It posed a threat to the manner in which we handled our business, as we either had to resort to smuggling goods into the country, which I was not going to do because of my value system, or change our strategic direction in terms of how our production was done. Hence, we approached the French company to join forces with us in producing and assembling furniture pieces in Nigeria.”
It took months of negotiation to tie up a deal with Sokoa and Guaranty Trust Bank to build a €3 million ($3.7 million) factory in Lagos. Production resumed 11 months after the government had thrown a spanner in the works. The factory, which employs 300 people, made a profit in its second year and is expected to have paid for itself in five.
“It turned out to be a blessing in disguise,” she says.
Awosika survived her worst day and has thrown herself into helping other Nigerian entrepreneurs navigate the choppy waters of business.
“Nigerians have great tenacity. In spite of the government’s presence, Nigerians have learnt to accept many limitations, which help them think and work outside of the box to create the solutions we desire. This makes us highly productive and this ingenuity is the reason I love my country. Nigerians are fast thinking; they are dynamic. Once you create an enabling environment, you’ll be shocked at what they can achieve.”
Awosika has set up a center in Lagos for the training of entrepreneurs called The Afterschool Graduate Development Centre and is launching a television series in September aimed at helping people to turn their ideas into a business.
“This country produces graduates by the million every year, without room for them to express themselves. We don’t have enough jobs nor an incubating environment to help them manifest, as entrepreneurs. They have a lot of great, fresh ideas, but no medium of expression, they also lack knowledge. There is also a disconnect between the financial institutions and the people who make the money.”
Wise words from a formidable lady who sits on several boards of big companies in Lagos and is never likely to be short of a chair.

You Had Better  Sit Down For This One

It came like a bolt from the blue. On the evening of October 20, 2006, Tabitha Karanja the chief executive officer (CEO) of Keroche Brewery Limited was working late in her brewery head office in Naivasha—65 kilometers from Nairobi. Her husband, Joseph Karanja had just gone to Nairobi hospital where he was to undergo minor surgery the next day.
Karanja was winding up so she could rush to see him. As she was leaving, a fax arrived. It was after 5pm and she was curious about who sent a fax so late in the day. Her curiosity turned to shock in seconds. It was the tax man. The Kenya Revenue Authority (KRA) demanded KSh 1.2 billion ($14.117 million) in arrears to be paid within 14 days.
The competitive Kenyan brewing game is tough and like many entrepreneurs, Karanja had weathered many storms. Detractors allege that Keroche products were not prepared hygienically; once she invested in a multi-million dollar plastic bottling plant which was made obsolete overnight by a law banning plastic packaging. On a radio at the office, in the press of busy day, Karanja would hear politicians attacking her beer in Parliament.
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“One member of Parliament alleged that our drink was killing three people in his constituency every day. Considering Kenya has over 220 constituencies, how many people is that?” she asks.
Karanja fought back, she wouldn’t allow anyone to denigrate Keroche products unless they had evidence from the government chemist or the Kenya Bureau of Standards.
It meant the feisty Karanja was often in the media, if she was not threatening to sue the government, she was complaining about raids on Keroche depots by administration police or damage to her billboards by the competition. She has been to court six times to defend her beer business.
This was a world away from her humble beginnings in the age-old story of an entrepreneur spotting a gap in the market. Karanja and her husband, who were traders of manufactured goods, started out as rookie brewers in a cut-throat market. They found themselves in competition with multinational giant, East African Breweries Ltd (EABL).
Their strategy for the alcohol business was simple—to supply beer to thousands of villages in Kenya.
“The brewers who were there, only catered for the upper end of the market and people in the villages were left to drink whatever they could make—the traditional drinks. So we thought, why not make a hygienic and affordable alcoholic product. Our first product, a fortified wine, was released in 1998,” says Karanja.
Karanja says the rough waters have merely made her more determined.
That is, until the brush with the tax man crushed her spirit.
“That was the day I understood why people collapse when running a business. You wonder why a businessman who was getting into his car just died or collapsed in his office.”
On that fateful October evening, Karanja saw the future and it looked terrible. Her eight-year-old brewery, the business she had shed sweat and tears to build, was about to die.
The tax demand did not include interest and penalties. In total she owed the KRA around KSh2 billion ($23.8 million).
“I thought these people wanted to kill me so my employees could find me dead the next morning,” she says.
It got worse. After reading the fax several times, she called the KRA Commissioner’s office in a panic, but she could not get through. It was late in the evening and the government office was closed.
“KRA claimed that the business licence I was given in 1998 was wrong. I was paying 45% tax but they were demanding 65% backdated to 1998. You know how powerful the tax authorities are, not only in Kenya but everywhere in the world. I was literally shaking!”
At the back of her mind, Karanja knew it would be difficult to get a lawyer to fight KRA. Unable to get through to KRA, she went to visit her sick husband. She did not break the news to him that night, instead she went home and had one of the longest nights of her life. She did not sleep a wink.
“I was feeling awful; I panicked because I knew these guys had cornered me. My spirit was devastated,” she explains as her voice breaks.
When she informed her lawyer about going to court, he was hesitant.
Two days later, the lawyer broke the news of court action to her husband on his release from hospital.
“I remember I called the KRA Commissioner and told him I was not going to die. I am strong and I was going to fight!”
Karanja wanted the matter settled out of court but her efforts to get any of the KRA officials before the 14-day deadline were unsuccessful.
“I wanted to show them that they were wrong because I had all my facts,” she says.
It did matter. Time was running out and she knew, if she waited, KRA would freeze her bank accounts and take over her business. So she went to court and fortunately the 14-day order was stopped and after one year the case was thrown out—she had won. After all the pain, angst and fear—she had won.
That was the most horrifying point in her life. There were days she was filled with doubt and fear.
“Fortunately, the judge ruled that it was misuse of power and nobody could explain the KSh1.2 billion ($14.3 million) figure. Furthermore, I was the only one required to pay yet there were 10 other players. I am sure if we did not win that case, Keroche Breweries would be no more,” she says.
In the year she was battling KRA, there were money worries too. The bank was in the process of approving a KSh500 million ($5.9 million) loan for a new plant she wanted to set up for the launch of a new beer called Summit Lager.
“There was so much at stake—our business, our dreams, our investments and other entrepreneurs who looked up to us…”
Fortunately, the loan was approved in December 2007. But her struggles were not yet over, with an on-going case in court, things turned sour when Kenya experienced post- election violence following elections in December 2007. The equipment had been delivered and installed but business only started in June 2008.”
Despite the turmoil in the country, for banks it was business as usual. By February 2008, the bank was knocking on Karanja’s door. She had to start repaying her loan and the interest.
“The bank had warned me they would repossess the equipment if I did not start repaying the loan. I borrowed KSh10 million ($118,835) from a friend without a clue of how I would repay the rest in the coming months,” she says.
Karanja borrowed from the same friend twice.
“I struggled for months. I was entirely dependent on the products and we did not have extra money.”
For three months Summit Lager beer did not move off the shelves.
The sales from a vodka mix, launched in 2007, were not adequate to service the loan. While the company was in the process of growing the Viennese vodka brand they noticed a gap in the beer market—the same market where EABL enjoyed a monopoly.
“People only had one choice. We decided to produce a premium beer product and that is how Summit Lager was born.”
Keroche was in direct competition with EABL’s cash-cow—Tusker. Even the mighty South African Breweries Miller (SABMiller) had been unsuccessful in the Kenyan market and now Keroche found itself staring the giant down.
With a big loan to repay, Karanja was hell-bent on hanging on. She tried every trick in the book and even hired marketing professionals from the competition to help push her products but they too were unsuccessful.
“I understood them; we were fighting a losing battle. The people in the bars were being paid not to sell Summit Lager, our posters were defaced, a client would ask for Summit but they would be told the drink is not available.”
Frustrated, Karanja decided to do something radical. Together with her husband, they went to the market and talked to the distributers in 10 regions around Kenya and offered them an incentive—for every two crates they sold, they would get one free. They also went to the Parliamentary Committee to complain about the unfair competition.
“There is a time we had one million liters in the tanks and had nowhere to take it. Our business was 100% financed by the bank and it would not have been long before they [the bank] came for us.”
Karanja went before the Committee and EABL officials were summoned. She only wanted one meeting because she felt it was a waste of her time.
“I left the meeting disgruntled and told them [my staff] we should fight it out in the market so that I know I was defeated out there instead of a boardroom.”
The courts and then Parliament: it was a long way from the humble beginnings of Keroche. The seed capital was KSh100,000 ($ 1,176) which came from family savings.
The money was used to buy a second hand bottling machine that produced 200 bottles a day—around 10 crates.
“We could not approach the banks but as the business grew, we started attracting financiers,” she says.
When they needed additional capital, the local banks could not loan them the money, so in 2006 they approached Barclays Bank Plc in London for a KSh500 million ($5.9 million) loan. With all that was going on, Karanja, was in constant touch with her bankers. In 2009, her bankers almost gave up on her and a risk audit team from London was sent to look through her books—they spent one month there.
“We were put on a business support program because they also panicked when they saw we were unable to move any beer.”
When having a discussion with one of the auditors, he asked Karanja why she had decided to compete with a multi-national like EABL.
“I remember pleading with him because he was the one who was going to write the report. I begged him to give me an opportunity so that I could prove that a local entrepreneur could make something better than Tusker. I also challenged him to tell me why there should not be a competitor to Tusker.”
The bank official seemed to agree but he was very skeptical. He told her that her business would not last long.
“He gave me three months before I went under. For me to compete with Tusker I had to make a superior drink and I am convinced without doubt that our quality is superior!”
To date, Keroche has two beer brands, two ready-to-drink vodka brands, four spirits and three wines. With a current 5% market share, by end of 2014 Keroche is looking at controlling 20% of the market. Keroche currently owes the bank less than KSh200 million ($2.4 million) and is looking at borrowing KSh1.5 billion ($17.9 million) to expand by producing soft drinks.
<h3>What Did She Learn From Taking On A Giant In The Industry?</h3>
“Whatever you feel you want to start, you must know exactly what you want to do otherwise when you face one challenge, you will run away. Secondly, whatever you are doing you must offer a superior quality and be convinced beyond doubt that it will succeed.”

Beer, Sweat and Tears

Tara Fela-Durotoye, known simply as Tara, is the CEO of the largest and pioneering make-up company in Nigeria, House of Tara. In 2003, her bank manager assured her that a loan of N500,000 ($3,125) to set up her first store was on the way. She had paid a non-refundable deposit of N150,000 ($937) to secure the store with high hopes of the loan.
Tara’s university friends, who liked the way she did her make-up, encouraged her to start the business.
“I didn’t see any opportunity at that time for me, and because it wasn’t an industry that existed in Nigeria, it didn’t seem like something that was possible. I couldn’t understand why anybody would want to pay to have their make-up done,” she says.
All this changed when people she made up agreed to pay whatever she asked. The next step was to start a business.
“I was so passionate about building a company, I didn’t want to build Tara; I wanted to build people, who would then build the company, who would then build the industry. But I didn’t know how to go about it because I didn’t have experience. I have never worked in a big organization, but it’s something I want to live for: a company that Nigerians would be proud of, a company that Africans would be proud of.”
The banking system in the country wasn’t much help at the time. In those days, they would rather have lent to the oil and gas industry.
“At that time, the industry was new and the bankers didn’t understand what we were doing; they didn’t even believe that it was possible. They didn’t realize that in the US, for example, the cosmetics industry generates revenue of $150 million a year. The banking industry in Nigeria then didn’t have that understanding and hence if I came to ask for a bank loan, it was impossible for the banks to give me one because they didn’t understand my industry.”
On the day the bank said ‘no’ to the promised loan, Tara was devastated. Her resolve to win through came from an earlier disappointment. “I always wanted to be lawyer; my father was a lawyer… plans had been made for me to go study law at Cambridge University,” she says.
Before she could dream of flying to England, the plan was dashed. She came home from school one day and her mother told her that her father, a Cambridge University alumnus, had suffered a stroke and he needed to be flown out of the country.
“I know that you were supposed to go to school in a few months, but I don’t think that is still possible until we know what is happening with him,” her mother said. It meant she had to study law at the University of Lagos instead.
The painful experience made her the determined person she is. Before graduating as a lawyer, she pursued her business dream with a vengeance, and five years after graduation, Tara had a name. She was well known for doing the make-up for elite weddings in Nigeria. She created her own product line, “Tara”, but this was not enough for the feisty businesswoman, who wanted to expand—a desire that once again put her on a collision course with the bank managers.
Luckily, this time around she had strong weapons: a thriving business and a mentor who introduced her to a manager of another bank. Her mentor said: “I have heard your story many times and I know that it is a very compelling and very inspiring story to share. The MD will buy into it and I’m sure that you are not going to leave there without getting the finance. Make sure you don’t ask for N500,000 ($3,125)—this time, you are seeing the MD of a bank; open your mouth wide and God will fill it.”
With that, Tara went to the bank, made her presentation and God indeed filled her mouth, to the brim, with N15 million ($93,750).
“I did get the facility, I did pay the loan back and today the banks are chasing us,” says Tara, whose company started with just a box and is now worth $3 million.
Today, House of Tara is the official make-up company for the ARISE Fashion week. Apart from being first and foremost a make-up and beauty company, it also has a training institute which empowers young ladies to be independent by giving them all-round training in the business of beauty. To date, it has churned out 1,000 professional make-up artists and 2,000 trained women. The company has 11 branches spread across the country and 12 more will be opened before the end of the year. Maybe Tara could soon be looking for yet another bank loan.

A Loan Denied, Alone She Struggled

Professor Njuguna Ndung’u, the governor of the Central Bank of Kenya, and one of the country’s most influential men in economic matters, is not known for being talkative. Partly because of his reticence, the few public remarks he makes are studied carefully.
These days, however, Ndung’u is displaying a wholly different side, allowing himself to be caught up in spectacular public squabbles with politicians over deteriorating economic indicators reflected in high inflation, a weak Kenyan shilling and rising interest rates.
“Policy making is very challenging,” he says. “You have to understand what  the right policy is and understand which tools to use.”
Booking an appointment was a lot easier than actually sitting down with the governor on the day. He postponed twice—from 10am to noon, and then to 3:30pm—so he could attend a grilling from the parliamentary committee on the controversial award of a currency printing tender to De La Rue of France. You would think that facing unforgiving legislators in an unforgiving part of the world would be about the worst thing for a banking regulator who is used to dealing with polished economists and bankers.
“There are no worse days for me,” he says calmly, as he sinks into his black leather seat which squelches in protest.
“I work day and night. There’s no worst day or best day. Today it could be inflation; tomorrow a parliamentary committee wants certain statistics; and so on,” he says.
But looking back, it is obvious that as far as bad days go, some are worse than others. In 2009, the global financial crisis started trickling down to Africa, especially in countries connected to the west like Kenya and South Africa.
Even worse, the financial melt-down—which began in the US with the collapse of the mortgage market—came to Kenya when the country had barely recovered from the violent two-month political crisis of January and February 2008 which had not only scared away foreign investors, but also slowed economic growth and production.
“That recovery was painful. It was painful because 2008 was a difficult year, and 2009 was devastating because by the time we were dealing with the post-election aftermath, the economic crisis hit us,” he says.
When there’s a crisis in Europe or the US, skittish investors fear it will spread to developing countries. In 2009, Ndung’u, who is an associate professor of economics at the University of Nairobi and holds a PhD in economics from the University of Gothenburg, Sweden, was a worried man.
“We tried to understand our
internal crisis, but with the global financial crisis, you were waiting every day, waiting for something to happen.”
For a man who implements quick yet well-thought out actions, the waiting game was unbearable.
It was just past 5pm on a cold Friday in August in 2009. In a dimly lit office at the Central Bank headquarters in Nairobi, Ndung’u, an economics author and a fan of Shakespeare, stared blankly at the markets trading board, his lower lip trembling at the gravity of what he was witnessing. This was tragedy worthy of Macbeth.
What was happening was crazier than anything he could have imagined. Global stock markets were swooning, currencies were being crushed and financial systems across the world were punch-drunk.
From his third floor office, looking out at the skyline of East Africa’s strongest economy, Ndung’u’s well-tuned economic antennae began picking up danger signals. Too late for him; Kenya’s financial system and stock market were already in panic, and the numbers were not looking pretty.
“There was not much we could do. It was the public panic that we were waiting to contain,” he says.
That day, when the global financial crisis hit and he could do nothing about it, was his worst day.
Helpless, he could merely watch as it triggered events that would challenge his reputation as Central Bank governor and plunge Kenya’s economy towards recession. The economy grew by 2.6% that year, compared to 7.1% in 2007. It was all work and no play for the professor.
“We were looking at all avenues to manage it. The other crises we knew [about] were speculative attacks from Europe. But now we were, day and night, looking at what we could do without contradicting domestic policy. Because we had signed Article 4 with the International Monetary Fund (IMF) and so we could not restrict forex controls like South Africa and Tanzania.”
This meant that the humble Kenyan shilling was left to the mercy of the crisis. It was pummelled daily as investors dumped it and scampered for safety to international currencies like the dollar.
This was not good for Kenya, as it further squeezed an economy emerging from intensive care.
This is the man named after a leprosy outbreak, that hit Kenya in the fifties, who takes struggle in his stride. With a smile, he remembers the famine of the 1960s, when the country was forced to eat maize, and the multiple political economic crises of the 1980s.
“Crises will always come and go. Any crisis is a lesson and any challenge must be surmounted,” he says.
Ndung’u is a tall, tireless 60-something with an angular face, a modest voice and a smile that rearranges everything on his face, ending with deep dimples on either cheek. Armed with years of experience in theoretical economics, teaching at the university and working for a number of organisations, he intended to beat the global financial crisis.
No longer would the Central Bank of Kenya sit and wait for an onslaught by the big boys, he resolved. But like many central bankers across the world, Ndung’u was merely chasing shadows.
“Even America didn’t understand until Lehman Brothers collapsed and that’s when we started mapping out who was trading with Lehman and who was holding the toxic assets.”
Lehman Brothers Holdings Inc. was a global financial services firm and the fourth largest investment bank in the USA after Goldman Sachs, Morgan Stanley and Merrill Lynch. It conducted business in investment banking, equity and fixed-income sales and trading, investment management, private equity and private banking.
On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection following the massive exodus of most of its clients, drastic losses in its stock, and devaluation of its assets by credit rating agencies. This is believed to have played a major role in sparking the global financial crisis.
The domino effect spread through the global financial system, and fuelled capital flight from markets thought to have been overly exposed to the so-called toxic assets.
“The beauty of it is that we have a strong financial industry in Kenya. And it has developed. Only we don’t have faith in it; but in CBK we have faith.”
Ndung’u says his academic background combined with his years of experience gave him the upper hand in managing the crisis. He used all the monetary tools at his disposal, such as interest rates to reduce the cash supply in the economy and increased vigilance on banks and other financial institutions, to ensure they were operating within the required liquidity levels.
In spite of the best that his arsenal could muster, the impact of the financial crisis – which is still being felt in certain quarters, especially through inflationary pressures and currency swings—saw the governor being voted as worst performer in Africa by Reuters in 2011. He takes the dubious honor in his stride.
“I don’t fear being rated; it makes you think fast. If you ask them to give you the previous ratings of governors, they won’t show them to you. Rating is a family of indicators and having to control inflation is a weak way of rating. If there’s a shortage of maize and there’s a rise in prices, you cannot say you are going to rate the governor on that. People will laugh at you. But I don’t fight with the media. That’s their business.”
With a demanding job that requires a stiff upper lip, the governor says he unwinds by playing golf on Sundays. But even his madness has a method, and the reason he enjoys golf, he admits, is because ultimately it is about strategy.
“Golf is about the brain: you have to be relaxed in mind and you have to have a strategy. I used to play lawn tennis until I realized I was growing old and my legs were wobbling,” he says.
But it is his football stint during his school days that he talks passionately about.
“My advantage was that I could dodge with the left or right leg and I would use both legs for scoring as well. That’s why you can see my hands are injured and not my legs,” he says, exposing three scars on his left arm from his footballing days. His ambidexterity and the game’s ability to stimulate intelligence, vision and strategy stood him in good stead both on the football field and in the wood-panelled offices of the Central Bank.
A nation passionate about football could not wish for a better captain guiding their economic future.
“Soccer requires intelligence, good vision and strategy. And all these qualities are applied in managing the economy,” he says.
Except when a striker, in the shape of a world financial crisis, is tearing your defense apart.

Crisis 1 Governor  0

The lights are out at the 1Time offices in Isando in Johannesburg’s East Rand. There’s no receptionist on duty and you can park in anyone’s parking spot.
It’s business unusual for the budget airline that went into provisional liquidation in November, leaving the airline with its wings clipped. But group CEO of 1Time Holdings Blacky Komani is trying not to flap and to keep his eyes on the horizon.
“It’s true I’m not sleeping at night, I keep thinking about what else I can do,” he says.
He’s sitting in the very boardroom seat where he made the decision to suspend all services that first Friday of November. He knows it was a Friday because the start of the weekend would be a critical factor in the perfect storm he says led to the airline being grounded.
“Once you’re in business rescue, which we were from August, you have to pay everything in cash and if it’s a weekend you have to pay for the whole weekend in advance. If you don’t have a proof of payment by 3PM on Friday for fuel and other expenses you’ll be grounded,” says Komani.
He says up until just 2PM that afternoon they were confident they’d make the deadline. Negotiations were looking good with UK-owned budget airline group Fastjet and creditors seemed likely to consent to a lifeline. But the storm got ugly, creditors baulked and Fastjet was sent scurrying.
At 2.23PM (he remembers the time exactly) he made the call for suspension of services, leaving hundreds of passengers stranded and his staff in tears and total shock.
“I didn’t believe it myself. I remember calling my wife, Pam, a little after we made the announcement. I phoned her but I couldn’t say the words ‘We’ve gone into liquidation’,” he says.
The 49-year-old from Kwelera, East London, had put up his Bryanston house as collateral when he, as one of six Mtha Aviation shareholders, went to the Industrial Development Bank (IDC) for a R49 million ($5.49 million) loan to buy a 25% share in 1Time. The deal went through in March 2011.
Komani, who lived in the States for 10 years, was in New York when the Twin Towers fell in the 9/11 tragedy. He says watching 1Time implode was like watching those towers crumble over 11 years ago. It was an emotional ground zero for him too. He shed tears publicly at the time and admits to being too overwrought to make media statements. He says he felt he let down his staff and members of public, who had come to trust the no-frills carrier.
“You feel so alone, like you’ve tried everything and it’s still not enough,” he says.
The abrupt halt to business could not have come at a worse time, just weeks before Christmas. This weighs heavy on Komani’s mind, and so too does the suicide of a pilot who was on 1Time’s payroll, just weeks after the airline was grounded.
It wasn’t supposed to turn out like this. For Komani entering into the airline industry meant merging his love for business and his passion for tourism. Giving travelers greater access to air travel across the continent had to be the next leap forward for tourism and business, he figured back in 2010.
But four factors created turbulence 1Time didn’t need.
“The World Cup didn’t deliver what we expected in terms of business opportunities. We acquired the maintenance facility Jetworx that came with its own problems. New player in the market Velvet Sky was taking a cut of passengers from us and when we’re talking about the low-cost arena, those last 10 passengers are what you need to stay in business. The final factor was that the oil price never dipped below $110 a barrel. Anything above that means you’re in a very tight position,” he says.
Critics—including trade union Solidarity, who had access to 1Time’s records during its period in business rescue—say 1Time was doomed with bad management practices. These included a glut of staff, especially at Jetworx, even when the airline was down to a fleet of seven aircraft; not clocking up enough flying hours a month; fat management incentive payouts when 1Time was floundering; and deficiencies in credit and cash flow management.
Komani doesn’t believe he fiddled while Rome burnt. He says they knew they were in trouble in May 2011. He says they started cutting costs and dropped three planes from their fleet of 10. Trimming the fat meant flattening their management structures, plugging leaks and stopping wastage and theft. They optimized flight schedules and Komani says he took a 10% salary cut and didn’t take bonuses.
“Ironically by October last year, just one month before we suspended flights, our records showed that the company had actually saved R30 million ($3.4 million) that year compared to the same figures from the previous year,” he says.
But it was too late. Even though they managed to sell Jetworx, saving around 250 jobs by February this year, liquidators were looking to divvy up the pie to creditors. Komani and his team’s big hope lies in UK-based Fastjet sealing the deal. Fastjet is the African version of Stelios Haji-Ioannou’s EasyJet venture in the UK. They will buy the company for R1 ($0.10) and inherit the R462 million ($52 million) debt. Fastjet’s designs are to broaden its pan-African flight route.
It’s a tricky deal. Fastjet, headquartered in Dar es Salaam, Tanzania, has been in dispute over unpaid leasing and maintenance bills to a Canadian aircraft leasing company. It’s also tangled up in an outstanding tax claim of around $2.4 million in the East African country.
Back in South Africa, the deal is still subject to the thumbs up by South African transport minister Ben Martins. 1Time will be hoping for a precedent-setting exemption to allow for more than 25% foreign ownership in a local airline to meet Fastjet’s majority shareholding aims. But other domestic airlines have objected to the application, saying it will erode the position of local aviation shareholders. A nod from the minister will give Fastjet international route rights without the company having to follow standard route license application processes, they say.
Komani sees it differently.
“I think the minister understands it’s an important decision around keeping the low-cost air travel model alive in South Africa, and also that there are over 540 jobs from the airline at stake,” he says.
Even if the deal comes through it could leave him out in the cold. He could be edged out as management structures are further pared down.
“I have a love of people and right now for me saving jobs is the most important box to tick. For me, I’ll come right one way or another.
“The lessons I learnt have been about implementing rescue measures early on and making sure they take effect as quickly as possible. Also that loyalty and leadership in tough times matters—anyone can be a good leader when things are going well,” he says.
Another worry on Komani’s mind is Skywise—brainchild of 1time founders Rodney James, Glenn Orsmond, Michael Kaminski, and Johan Bortslap, and more recently Wayne Duvenhage. The new budget airline is set to take to the skies in the second half of 2013, with three daily flights between Johannesburg and Cape Town and more destinations to follow. Skywise was granted an air service licence in March.
He may have lost his appetite for aviation right now but Komani’s trying to keep his focus and his sense of humor. So when asked the question: “Chicken of beef?” He says: “Right now, I think I’m on a diet”.

Clipped Wings

The sun was unusually hot as guests enjoyed a sumptuous lunch in Diani, the sprawling coastal town in Mombasa, known for its beaches and coral reefs. Lunch time in Diani in February could almost be a scene from paradise—the wide blue Indian Ocean lapping against a pristine beach; European tourists, escaping freezing temperatures back home, sunbathing lazily.
The guests from Nairobi clearly knew their way around. Dressed in smart casuals and resisting the urge to pull off their shirts to catch a welcome breeze, they sighed with relief as they walked into the air-conditioned five-star hotel.
Among them was Atul Shah, the managing director of Nakumatt Holdings, the family-owned company that runs Kenya’s largest retail chain. With a number of his managers, he was on a mission: to supervise construction of a new Nakumatt store in Diani. They talked politics and did the sums for the new investment.
When his phone rang Atul Shah, like businessmen do, excused himself and stepped a few yards away. From a distance, witnesses say, you could see his face turn ashen and panic set in on what was to be his worst day. The caller with bad news was the manager of the downtown branch in the heart of Nairobi.
“It sounded like a dream,” says Shah. “Then I saw it on TV.”
<div id="attachment_524" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-524" class="size-large wp-image-524" src="/wp-content/uploads/2017/04/RTR242EP-1024x608.jpg" alt="" width="474" height="281" />Kenya&#8217;s President Mwai Kibaki (C) and Police Commissioner Hussein Ali walk past the burnt-down Nakumatt supermarket in downtown Nairobi, January 30, 2009. At least 22 people died and more than two dozen more were missing after a fire destroyed a supermarket in downtown Nairobi two days ago. REUTERS/Stringer (KENYA)</div>
It was a day that would haunt the owner of Nakumatt for the rest of his life. With 36 stores spread across the region, Nakumatt is the big brother of retail in East Africa. The majority of its stores, 30, are in Kenya, three are in Uganda, two in Rwanda and one in Tanzania, giving it a 15% market share of a crowded retail market where the big five supermarkets control over 80%. In the world of retail where numbers count for much, big is beautiful. Nakumatt has taken this maxim seriously and dotted the big towns with its elephant symbols. Nairobi is Nakumatt’s hub, with more than 10 stores tapping billions of shillings in disposable income from the rising middle class.
On this day, January 28, 2009, as workers broke for lunch, one of its city center branches went up in flames, turning stock and assets, worth Ksh250 million, to ashes. Eighteen shoppers and staff, perished in the inferno.
Shah went into crisis mode. He cancelled his three-day tour of Mombasa to fly back to Nairobi to handle the disaster, but all planes were fully booked that day. He had to manage the situation on the phone, with eyes glued to a TV, until the following day.
“We had lots of communication with my managers in Nairobi. We were all confused and focus was on rescue efforts to save lives. We knew we would overcome the fire but the loss of human lives is what broke us down. We had to do whatever it takes to minimize deaths.”
The blaze took fire fighters from the Nairobi City Council four days to contain. The flames were fed by exploding gas tanks.
“The first day was total confusion. On the second day we established a disaster team to manage the situation. The government also created its own team. We worked together well to make sure the families of those people who perished were taken care of. I was part of the team and was on the ground for four days,” says Shah.
The loss was even more painful as it came just a month after the retail chain’s other branch was flattened by bulldozers to clear the way for the construction of the Thika super highway through Nairobi. In the process, the company was caught unaware and lost most of its stock to looters.
Shah sets his loss from the fire at Ksh400-250 million in stock and Ksh150 million in furniture and other assets. To make matters worse, the supermarket management was accused of locking shoppers in the supermarket in the shop when the fire alarm went off to prevent them from running away with unpaid goods, but Atul denies this charge.
“There were all manner of accusations from sabotage to arson. But it emerged it was Kenya Power to blame because it had had power outages. It’s unfortunate that it’s us who were affected,” Shah said.
What most of the accusers did not know is that Nakumatt had three fire marshals at the branch, one of whom sadly died in the fire as he tried to rescue customers. When the fire broke out, the man in his thirties swung into action to do what he was trained to do. He lunged into the smoke to rescue one person; a second time to save another soul; the third time the brave fire marshal did not return.
“It surprised us because the fire happened just two weeks after we had undergone a thorough fire audit by the Nairobi City Council. The company has since then enhanced its fire safety by training staff on emergency response and employing experts to beef up its compliance above the industry benchmarks. The quick-spreading fire was blamed on the presence of LPG gas cylinders and now the government has decreed all supermarkets not to stock cooking gas on their premises.”
Shah says Nakumatt spent Ksh40-50 million in managing the situation, including financing forensic tests to identify those who died in the fire and compensating those who lost their loved ones.
To make a bad situation worse, Kenyans looking to make a quick buck faked the deaths of their relatives in the fire. Nakumatt’s forensic analysis has already discovered three fake claims and has flagged two more for investigation.
“Some people claimed they lost relatives who had come to shop but produced death certificates of people who died a long time ago. Only 18 have been found to be genuine.”
The disaster did not end with the clearing of the ashes. The fire scared many shoppers and it took them months to come back to Nakumatt.
These were sad days for the company founded in 1978 by Shah’s father in the Rift Valley town of Nakuru. From a single shop dealing in mattresses; Nakumatt, short for Nakuru Mattresses, now has an annual turnover of $500 million. The first supermarket opened in 1982 and the company employs 5,100 workers.
Despite the setbacks, Shah is still betting on finding new markets.
“The retail market has opportunities. Organized retail is growing and especially with government recognition, the market space is expanding.”
In his office, on the wall facing him is a quote by Haku Shah, his father, which says: “In a day when you don’t come across any problem, you can be sure that you are traveling on the wrong path.”
These words sustained Shah through his worst day—January 28, 2009—a tragic day that will haunt him for the rest of his life.

Category: My Worst Day

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