Nairobi city lawyer Donald Kipkorir has opened up about a personal investment loss that wiped out KSh20 million, highlighting the risks of trading at the Nairobi Securities Exchange (NSE).
In a statement on X, Kipkorir said that about 15 years ago, he teamed up with roughly 12 friends to form an investment company called LK40.
The group pooled nearly KSh20 million, hoping to profit from Kenya’s “hot” stock market at the time.
A stockbroker advised them to invest heavily in Kenya Airways (KQ), Mumias Sugar Company, and Kenya Power (KPLC), each trading at about KSh50 per share.
Confident the shares would soar, they put all their money into the three counters.
However, the optimism quickly turned to heartbreak. Mumias Sugar, once a flagship industrial company in western Kenya, faced financial distress due to mismanagement, political interference, and failure to modernize operations.
It eventually went into receivership, with shares suspended and values collapsing to below KSh1, wiping out investors’ savings.
Kenya Airways, similarly, plunged from over KSh50 to below KSh5 after years of heavy borrowing, rising fuel costs, currency depreciation, and declining passenger numbers, despite repeated government bailouts.
Together, the two companies became symbols of massive shareholder losses in Kenya. KPLC, although more stable, has only partially recovered, trading modestly around KSh15.
Kipkorir explained that the NSE of that era was volatile and largely unregulated compared to today. Investor education was limited, and much of the trading was driven by speculation and market hype.
Many retail investors were drawn in by the prospect of quick profits, often relying on brokers’ advice without fully understanding the risks.
LK40’s experience reflects a broader cautionary tale from that period, showing how even well-capitalized investors could lose millions in a short span.
He said the loss was so severe that the group eventually abandoned LK40 and no longer knows the location of the share certificates.
“It was our foray into stock trading and left all of us crestfallen,” he said, noting that many of the investors were senior corporate executives who had been confident in their decisions.
Kipkorir’s story has sparked conversation online, with many Kenyans relating to the experience and seeing it as a warning about over-concentration, corporate governance failures, and long-term market volatility.
His reflections underline the importance of investor education, careful research, and professional advice when navigating Kenya’s capital markets.