A Canadian federal agency spent millions on a Kenyan company to create jobs in Kenya shortly before the company began to lay off staff, according to Blacklock's Reporter.
The federal agency, FinDev, was launched in 2017 by the Liberal government “to support private sector investment in developing countries.” The company was budgeted $300 million over five years.
FinDev's first funding initiative went to a Kenyan company called M-Kopa Solar. Based out of Nairobi, the nation's capital, the company sells solar-powered appliances. Despite FinDev holding out on publishing information requested under the Freedom of Information Act for over a year and blacking out much of the requested information, information on their activities was eventually released.
M-Kopa Solar was approved for funding at the end of February in 2018. The company was the first to receive funding from FinDev, receiving a total of $12.8 million. "We just received word that FinDev Canada’s first deal has officially closed!" a staffer celebrated in an email.
Unfortunately, less than two weeks later, on the ides of March, the company announced that it was laying off 150 employees.
Commenting on the blunder, the spokeswoman for FinDev, Amy Minsky, said that FinDev "had in place all infrastructure necessary to review and approve transactions in a responsible manner."
"The M-Kopa transaction underwent full due diligence," Minsky claimed. "It was presented to the board in mid-December 2017 and the board approved it in February 2018."
However, it appears that this was not the case. FinDev had no board of directors at the time, which was not announced until a month and a half later, nor had it opened its head office yet. It also did not have a Chief Investment Officer at the time the funding was distributed.
At the time of the investment, FinDev only had nine staff including a lawyer, a marketing specialist, and a "gender advisor."
When pressed on who came up with the idea of funding M-Kopa Solar, Minsky said that former CEO Paul Lamontagne "brought the proposed transaction to the board." Lamontage, a former CIBC executive, resigned from FinDev in September after the Globe and Mail began an investigation into his business dealings in South Africa.
According to a 2018 memo by Lamontagne, he declared that he would be managing the investment. “Since our investment officers will not start until the summer, I will manage the relationship with M-Kopa and serve as our board observer,” Lamontagne wrote. “As you know, this makes sense as I have a history in Kenya having previously served as chair of a local impact fund. In fact, I just returned from meeting M-Kopa in Nairobi.”
FinDev has not had their operations reviewed by the government in their nearly four years of existence.