Mudavadi’s Sh3 Billion Absa Deal Raises Fresh Questions Over Sh363 Million Bank Dispute And The DPP
Prime Cabinet Secretary Musalia Mudavadi is facing fresh questions over his private business interests after details emerged of a Sh3 billion insurance acquisition involving the same investment company at the centre of a bitter Sh363 million dispute with three of Kenya’s biggest banks.
The developments have brought together two major financial matters involving First Assurance Investments Limited, raising questions about the source of the acquisition funds, the timing of the banking dispute and the involvement of state prosecutors in a commercial disagreement touching one of the country’s most powerful political figures.
According to a Business Daily report published on October 18, 2026, an investment company linked to Mudavadi and Lamu Governor Issa Timamy has agreed to pay approximately Sh3 billion to South Africa’s Absa Group for controlling stakes in two insurance companies.
The transaction will see First Assurance Investments Limited acquire Absa’s 63.32 percent shareholding in First Assurance Company Limited and Absa Life Assurance Kenya Limited, effectively returning control of the businesses to local investors associated with their previous ownership.
But the deal comes with uncomfortable questions because First Assurance Investment Company Limited has also been at the centre of a Sh363.4 million alleged fraud case that dragged NCBA Bank, KCB Bank and Co-operative Bank into a confrontation involving senior executives, criminal investigations and the Office of the Director of Public Prosecutions.
As the country approaches the 2027 General Election, Mudavadi now faces a sensitive situation in which his private business interests and the conduct of powerful public institutions are under scrutiny at a time when political leaders would ordinarily want such controversies settled.
Where is the Sh3 billion coming from?
The biggest question arising from the latest acquisition is how First Assurance Investments intends to finance a transaction estimated at Sh3 billion, particularly when a related company is simultaneously pursuing recovery of hundreds of millions of shillings allegedly lost through its own bank accounts.
Business Daily reported that the investors have agreed on an estimated Sh3 billion price, although the transaction remains subject to regulatory approvals and the precise financing arrangements have not been publicly disclosed.
Mudavadi’s investment interests are substantial, having declared a net worth of approximately Sh4.1 billion during his parliamentary vetting in 2022, including holdings in insurance, property and other private companies.
However, declared personal wealth does not automatically explain how a company intends to raise Sh3 billion in acquisition funding, especially where the payment could involve shareholder contributions, commercial borrowing, existing investments or other financing arrangements.
Will the acquisition be funded through retained company earnings, fresh shareholder capital, loans from financial institutions, or money raised against assets already controlled by the investors?
Who will provide the financing, what security will be offered, and how much of the acquisition price will ultimately be contributed by the investment vehicles associated with Mudavadi and Governor Timamy?
These are questions the investors can answer without necessarily exposing every private commercial detail, particularly given Mudavadi’s senior public office and the separate criminal proceedings involving the investment company.
As previously reported by TSM, the Sh363.4 million controversy arose from allegations that former nominated MCA Salim Mohamed Busaidy unlawfully withdrew company funds between May 2018 and April 2024 using cheques allegedly bearing forged signatures.
Prosecutors accused Busaidy of exploiting his position as a company director and accessing accounts held at NCBA, KCB and Co-operative Bank, with the transactions forming the basis of numerous charges involving alleged theft, conspiracy and unauthorised documentation.
Busaidy denied the charges, while the three banks became embroiled in a separate dispute over whether they had fulfilled their legal obligations concerning suspicious transactions associated with the alleged withdrawals.
The controversy escalated after reported efforts by representatives of the company to secure refunds from the banks, including reports that the institutions were given a 24-hour deadline to agree to repayment before the matter moved further into criminal proceedings.
The banks did not agree to the proposed repayments, and the DPP subsequently moved to prosecute senior banking executives over alleged failures to report suspicious transactions, an extraordinary development involving the leadership of three major financial institutions.
The bank executives challenged the prosecutions in court, securing interim High Court orders in August that halted the proceedings against them and raised further questions about the legal basis for pursuing individual chief executives.
Mudavadi should explain whether he personally contacted any investigative or prosecution officials about the dispute, whether his representatives sought intervention from state agencies, and what communications accompanied the reported demands for repayment.
The DPP should likewise clarify the evidentiary basis for pursuing the bank executives, the relationship between the criminal proceedings and the disputed repayment demands, and the safeguards applied to prevent improper influence.
