Canadian Company Suspended from US Stock Trading over Sh139 Billion ‘Secret’ Loan Deal with Kenya

A Canadian company that allegedly signed a Sh139.5 billion ‘secret’ loan deal with Kenya has been temporarily suspended from trading in the US.

Kallo Inc. was suspended by the US stocks market regulator, Securities Exchange Commission (SEC) for failing to explain filings indicating that it inked the loan agreement with Kenya’s National Treasury.

On Thursday, SEC said the suspension is meant to protect investor interest and will remain in effect until April 7th, 2021.

“There is a lack of accurate information of questions regarding the accuracy of statements the company has made in filings with the commission, including a Form 10-K for the year ending December 31, 2020, filed on March 3, 2021,” SEC said in a statement.

“The commission has serious concerns, for example, about the accuracy of the company’s claim that it has entered into a contract with the Republic of Kenya to establish a comprehensive healthcare structure.”

Kallo’s filings with SEC dated March 3rd, 2021 indicated the company entered into the loan pact with Kenya in June 2020.

The funds were allegedly meant for the construction of mobile clinics and the upgrading of county hospitals in readiness for the rising number of COVID-19 infections in the country.

Documents stated that the loan was a 20-year facility charged at an interest rate of two percent plus LIBOR (London Interbank Offered Rate), which is charged at negative 0.4 percent. 

“On June 26, 2020, the company finalized contracts with the Republic of Kenya and Techno-Investment Module Limited (TIM) for a project contract and a finance contract,” Kallo says in the disclosures.

“Under the terms of the agreement, Kenya is seeking to borrow the sum of 1,068,932,543 euros from TIM and the funds are to be used primarily to build phase one of a planned National Healthcare Infrastructure.”

TIM, a Belarusian company, was expected to pay the loan amount directly to Kallo once Kenya issued a guarantee. Kenya was granted a three-year grace period and would start servicing the loan from 2023.

But Treasury CS Ukur Yatani denied the existence of such a loan agreement between Kenya and the Canadian company, terming a report by Business Daily as misleading and malicious.

“Treasury wishes to categorically state that the CS Ukur Yatani did not enter into any loan contract with a company by the name Kallo Inc. as claimed in the article and in the company’s filings with the US Securities Exchange Commission (SEC),” Yatani said in a statement.

“There is no evidence that the SEC made such a disclosure to the public, which raises questions as to the accuracy and veracity of the story,” said Yatani.