DOUGLAS Hoto could have sealed his own fate when he decided to go ahead with a business transaction without express authority from the current Patterson
Information gathered by Businessdigest last night reveals that Hoto could have been punished for rushing to operate the FML’s property company — Pearl Properties — without board permission.
The project had been approved by the previous board led by David Murangari but the current board headed by Timba had insisted on looking into the deal before they could give a go-ahead. Pearl Properties was formed by FML as a strategy to unlock value in their property portfolio.
Sources say Hoto defied a board directive to hold on to the project until it had approved it.
“The board wanted to have a look at the project to fully understand and add value to the proposal that had been approved by the former directors,” said the source. “Hoto however went ahead without following that process.”
Before Timba’s board could give ascent to the project, Hoto is understood to have gone ahead and opened the company for private placement to raise the required capital for it to take off.
Hoto had approached a local financial advisory service to assist with the private placement.
“When the Timba-led group of directors heard about this, they were livid because this was way beyond the powers of Hoto as the chief executive,” said the source close to the issue. Renaissance has since directed the advisory company to abandon the project.
“They (Renaissance people) thought this was the chance to push him out. They were just waiting for him to make a blunder.”
By yesterday the board of FML was still to decide on Hoto’s replacement, but sources indicated that Timba was likely to become the executive chairman. Timba will be there to safeguard the interests of Renaissance as well as run the company.
“This is because unlike the previous chairmen who represented the interests of all shareholders, Renaissance as a big shareholder would want someone who is hands on who will look after their interests. Renaissance are currently the biggest shareholder in FML even though they hold the equity through four other small companies.