Enko Capital Management, a private equity investor targeting mid-cap growth companies across Africa made the decision to invest in a Kenyan IT company only for it to end being defrauded.

Enko Capital is at the edge of losing Sh594 million should the Directorate of Criminal

Investigations (DCI) not intervene.

Kenyan based Software Technologies Limited (STL), a company specializing in software solutions founded by Jyoti Mukherjee used fraudulent means to acquire investment from Enko Capital, as unearthed by different audit firms.

It all started with STL seeking investment with Enko Capital coming forward with interest to buy stake in the company.

At this time, STL’s main shareholders were listed as Jyoti Mukherjee, the founder (19%), Sanjivan Mukherjee, (19%), Chaitanya Mukherjee (16%), TBL Mirror Fund (22%) and Mawa Holdings Ltd (10%).

In September 2018, Enko entered into a Share Purchase and Subscription Agreement (SPSA) with STL founders, Jyoti Mukherjee, her husband and children, Mawa Holding Limited, Itaara Group Limited among other partners.

Prior to committing to the purchase, Enko Capital did its due diligence by seeking legal and financial advice and all other relevant information that would necessitate the same.

Among the companies that played a key role in giving Enko Capital a greenlight to acquire stake in STL was Mazars Certified Public Accountants Kenya (Mazars) which served as its external auditor.

It later emerged that the Enko Capital had been supplied with fictitious documents, where they were shown an elephant on paper which later turned out to be a mouse.

Massive fraudulent details were discovered from the company. STL’s audited accounts had previously shown Sh887.45 million in revenues and Sh194.84 million net profit for the financial year that ended June 2018.

It was however later discovered that STL’s revenue was Sh220.77 million and net profit being Sh48.82 million.

These, among other fraudulent activities were choreographed by STL to trick Enko Capital into investing in their company. Here are other fraudulent deals that were commited:

>There was misrepresentation of STL’s financial position of the company making fictitious entries in the books of account of the company.

First, Enko Capital was furnished with two sets of management accounts by STL’s previous Financial Director, Mr Stephen Omwenga for the financial period ending June 30, 2018.

The two sets of management accounts depicted significant discrepancies. This later unearthed a fraudulent scheme which STL used to give a false depiction of its assets, liabilities and financial status.


There was an inflated level of spending on both capitalized and expensed intellectual property.

It was thus evident that STL under the advisement of several other key players deliberately created fictitious accounts in order to inflate the revenues of the company to justify a higher valuation for the business.

> There was production of false documentation to support misrepresentation of the number of company customers.

It was also discovered that STL maintained fake customer contracts to support inflated customer numbers. This was presented to Enko Capital to misrepresent that the company was generating more revenue than what it actually was generating. This played a key part as Enko Capital was sold the dream going by the numbers presented and not the actual reality.

Interestingly, STL presented to Enko Capital founders in February 2018 that number of users of one of its products as over 3,500. This was however not the case as an audit as of March 2020 revealed that the particular users for the said product were only 2,500.

Therefore, STL through false documentation and misrepresentation of numbers dupped Enko

Capital into believing it had acquired huge customer contracts which was indeed not the case.

> There was Irregular Withdrawal of Company Funds

Internal investigations of the STL bank statements further unearthed a scheme where the company siphoned funds for personal gain.

Jyoti’s husband, Sanjiv who was reportedly a member of the finance department withdrew (70,000 USD) from the company bank account without proper authorization of the co-signatories.

The investment agreement detailed the minimum requirement of signatories to two for funds to be withdrawn from the company bank account. Thus, the decision by Sanjiv to withdraw the funds could not have been solely necessitated hence proving that there must have been an agreement that supported the irregular withdrawal.

Also, at the center of all these is the irregular diversion of company funds to unknown third parties. According to Enko Capital, two cheques issued by the company were irregularly diverted to Sanjiv’s unauthorized payees without the approval of the board.

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