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, rising serious questions about equity practices at one of Africa’s most celebrated fintech success stories. Elizabeth Njoki. A long serving Kenyan employees who worked at M-Kopa from2012 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 class of shares called “Growth Shares” that were predominantly allocated to expatriates and white employees, while African staffs 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 48 recipients of Growth Shares, only seven were of African descent. In a subsequent round of share allocation, no Kenyan employee was included among the beneficiaries. The petition reveals that Growth Share came with superior benefits including buyback rights, preferential pricing, and guaranteed exits at fair market value – privileges systematically denied to African employees. The share structuring appears to have been triggered by concerns among major investors about potential dilution of their holdings. M-Kopa’s backers include high profile names cuch 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… 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 reallocation 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 inequalities 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 dominant mobile phone distributors in Kenya. Yet the petition suggests that while the company profited from Africa markets and African talent, the benefits of that success were systematically channeled away from African employees towards white staff and international investors

M-Kopa Holdings has filed a preliminary objection seeking to strike out the petition, arguing that shareholders disputes should be heard in English and Welsh courts rather than Kenya court. 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…