Genghis Capital, a Kenyan investment bank, has accused Safaricom of “business fraud” over the launch of a competing money market fund, Ziidi, which the telco rolled out in November 2024.
The dispute centres on Safaricom’s alleged decision to stall the rollout of Mali, a fund launched in partnership with Genghis in 2020, and instead register the rival Ziidi product, approved by Kenya’s Capital Markets Authority (CMA) on November 27.
In a letter seen by TechCabal, Genghis Capital accused Safaricom of breaching an agreement, claiming the telco’s actions amounted to “business fraud.” The letter, dated December 3, 2024, asserts that Safaricom delayed the launch of Mali while working with other third parties to register Ziidi, violating the spirit of the 2019 partnership.
Safaricom defended its actions in a December 6 response, citing technical issues with the Mali platform. “As you are aware, a larger fund with these challenges would not only expose Safaricom to reputational risks, but it could also potentially result in adverse regulatory and legal action for Safaricom and Genghis,” said an excerpt from Safaricom’s letter.
In addition to the allegations of business fraud, Genghis also accused Safaricom of breaching privacy laws. The bank claims the telco has been migrating customers from Mali to Ziindi through the M-Pesa app without their consent, a breach of data protection regulations.
In September 2024, the CMA ranked Mali as the seventeenth-largest collective investment scheme in Kenya, with assets totalling $23.9 million. The fund generated $89,748 in revenue for Safaricom in the first half of 2024.
The dispute highlights the growing competition in Kenya’s wealth management and digital finance sectors as the telco seeks to expand its investment offerings through M-Pesa.
