M-Kopa Former Employee Reveals Embedded Racism in Company’s Share Structure

Kenyan fintech giant faces constitutional challenge over allegedly discriminatory employee shareholding scheme that favored white staff while sidelining African workers

A damning constitutional petition filed against M-Kopa Holdings has exposed what appears to be a systematic pattern of racial discrimination embedded within the company’s employee shareholding structure, raising serious questions about equity practices at one of Africa’s most celebrated fintech success stories.

Elizabeth Njoki, a long-serving Kenyan employee who worked at M-Kopa from 2012 to 2023, has filed the petition at the Employment and Labour Relations Court, alleging that the British-headquartered company deliberately crafted a shareholding scheme that protected white employees and global investors while disadvantaging staff of African descent.

The controversy centers on a 2019 board decision that fundamentally altered M-Kopa’s employee share ownership structure. According to court documents, the company created new classes of shares called “Growth Shares” that were predominantly allocated to expatriate and white employees, while African staff were reclassified as “Minor Holders” – a designation that stripped them of crucial shareholder rights including voting privileges, access to company information, and participation in shareholder meetings.

The numbers tell a stark story. Of the first 48 recipients of Growth Shares, only seven were of African descent. In a subsequent round of share allocations, no Kenyan employee was included among the beneficiaries. The petition reveals that Growth Shares came with superior benefits including buyback rights, preferential pricing, and guaranteed exits at fair market value – privileges systematically denied to African employees.

Protecting the powerful

The share restructuring appears to have been triggered by concerns among major investors about potential dilution of their holdings. M-Kopa’s backers include high-profile names such as British International Investment (BII), a UK government-owned development finance institution, and Generation Investment Management, co-founded by former US Vice President Al Gore.

When Treehouse Investments converted debt into new shares in early 2019, threatening to dilute existing preferred shareholders’ positions, the board allegedly designed what the petition describes as a “two-step anti-dilution plan” to protect major investors’ returns while tightening their control over the company.

The results were dramatic. Between 2019 and 2022, Growth Shares ballooned from zero to over 3.3 million, while Preferred Shares grew from 3.4 million to 12.6 million. Despite this massive expansion, the preferred shareholders maintained their 73 percent ownership stake. The only losers were Ordinary Shareholders – mainly Kenyan staff – whose collective stake plummeted from 27 percent to just seven percent, reportedly without their knowledge or consent.

Silencing dissent

Perhaps most troubling are allegations about how the company responded to employee concerns. Njoki claims she was threatened with legal consequences and job repercussions when she sought clarification about her share options. Court documents include emails warning that seeking legal advice could result in her being classified as a “bad leaver” – a designation that would disqualify her from receiving any shares.

The petition also alleges that the company engineered a “sham recapitalization” in 2021, artificially suppressing the company’s valuation through selective use of outdated benchmarks while rejecting more favorable comparisons with similar companies like Tala. This allegedly enabled further share reallocations that preserved investor control while locking in gains for Growth Shareholders.

The case raises uncomfortable questions about the practices of so-called “impact investors” – including development finance institutions and sustainability-focused firms – who position themselves as forces for positive change in Africa while potentially perpetuating the very inequities they claim to address.

M-Kopa has built its reputation on providing financial services to underserved African communities through innovative “pay-as-you-go” solar and mobile phone financing models. The company has been recognized by the Financial Times as one of Africa’s fastest-growing companies for four consecutive years and has become a dominant mobile phone distributor in Kenya.

Yet the petition suggests that while the company profited from African markets and African talent, the benefits of that success were systematically channeled away from African employees toward white staff and international investors.

M-Kopa Holdings has filed a preliminary objection seeking to strike out the petition, arguing that shareholder disputes should be heard in English and Welsh courts rather than Kenyan courts. The company’s legal team, through Anjarwalla & Khanna LLP, also contends there is no employment relationship between Njoki and M-Kopa Holdings, making the Employment and Labour Relations Court an inappropriate venue.

The company has characterized the lawsuit as an abuse of court process, setting up what promises to be a significant legal battle over jurisdiction and the substantive allegations of racial discrimination.

A test case for corporate Africa

The M-Kopa case represents more than just a single company’s alleged misconduct. It serves as a test case for how corporate structures in Africa’s booming tech sector can perpetuate or challenge existing inequalities. As international investment continues to flow into African startups, questions about who truly benefits from this growth become increasingly urgent.

For a company that has built its brand on financial inclusion and empowerment, the allegations paint a troubling picture of exclusion and exploitation at the very heart of its operations. Whether the courts will ultimately vindicate these claims remains to be seen, but the case has already sparked important conversations about equity, representation, and corporate responsibility in Africa’s rapidly evolving business landscape.