When M-KOPA Holdings, a UK-headquartered fintech with over five million users across five African markets, restructured its shareholding in 2019, it was viewed internally as a safeguard against dilution — a routine measure in the startup scene. Six years later, that decision is at the centre of a potentially high-stakes court case that could force Kenya’s venture-backed startups to reckon with questions on who benefits from companies’ growth.
A lawsuit filed by Elizabeth Njoki, a former manager at M-KOPA Kenya Limited, a subsidiary of M-KOPA Holdings, alleges that the company engineered a shareholding structure that denied Kenyan employees meaningful ownership while protecting white expatriates and global investors, including Generation Investment Management, co-founded by former United States vice president Al Gore.
The suit claims that M-KOPA discriminated against African employees in allocating equity. Njoki says in her filings that while African employees were assigned to a weaker share class known as “Minor Holders,” a newly created “Growth Shares” category — offering superior rights and exit protections — was mainly reserved for expatriate staff. Company records cited in court filings show that of 48 recipients of Growth Shares, only seven were of African descent. In a later allocation, none were Kenyan.
“The Directors, collectively and individually, knowingly acted to unfairly offer anti-dilution protections to preferred shareholders by prejudicing employees of African descent holding ordinary shares, while offering protections to employees of other races who held ordinary shares by compensating them with growth shares,” Njoki said in court filings.
M-KOPA disputes the claims and has asked the court to strike out the petition, arguing that shareholder matters must be heard in the courts of England and Wales because the company is incorporated in the UK. The company also stated that Njoki was employed by a local subsidiary — not M-KOPA Holdings — making the Kenyan labour court the incorrect venue for the suit.
“The Petition is misconceived, incompetent and an abuse of the court process, in so far as it purports to invoke the jurisdiction of this Honourable Court over an agreement governed by English law and under the exclusive jurisdiction of the Courts of England and Wales,” M-KOPA’s legal representatives said in its preliminary objection to the case.
In a detailed emailed response to , M-KOPA rejects the allegations as “baseless, disingenuous and entirely false.” The company stated that the Growth Share structure was introduced after its original Employee Stock Option Program (ESOP) was exhausted in 2018, and that both programmes were designed by third-party consultants and approved by the board to reward and retain talent.
“The difference in name reflects the company’s shift from a US to a UK domicile, where Growth Shares are a common alternative to options in private companies,” M-KOPA said.
“There are over 100 ESOP recipients and over 250 Growth Share recipients at M-KOPA to date. The majority of both ESOP and Growth Shareholders are of African descent.”
M-KOPA stated that allocation decisions were based on seniority and role, not race, and that the process was overseen by the HR board committee, chaired by an independent Kenyan director.
The equity system
However, Njoki states in court documents that when Treehouse Investments converted its debt into equity in early 2019, existing shareholders — including major investors such as British International Investment (BII) and Generation Investment Management (GIM) — faced dilution. To manage this, the board created Growth Shares, which included anti-dilution protections, guaranteed buybacks, and improved access to information.
According to Njoki, while local employees were moved into or kept in “Ordinary Shares” (later renamed “Minor Holders” and stripped of rights), foreign staff were compensated with Growth Shares. Between 2019 and 2022, preferred shares held by investors rose from 3.4 million to 12.6 million, while local staff shareholding dropped from 27% to just 7%, according to court filings.
In many startups, equity is offered to early employees as part of their compensation, with the promise of shared upside if the company succeeds. In theory, this creates shared incentives, allowing teams to grow together.
M-KOPA maintains that no racial disparity exists in its equity programmes, and that the restructuring was legally sound and part of common startup governance practice.
“Race does not and has never featured in our compensation decisions. Such an approach would be irrational and counterproductive,” the company said. “Less than 1% of our employees are expatriates, and the majority of those are African expats — such as Kenyans working in South Africa.”
Njoki’s filings claim that the changes created a two-tier system, one in which foreign staff and investors were insulated from dilution, while local employees saw their ownership rights quietly eroded. She claims the process lacked transparency and disproportionately impacted African staff.
Njoki claims that when she raised concerns internally, she was warned against seeking legal advice and threatened with being classified as a “bad leaver,” risking her options being revoked. M-KOPA denies this outright.
“Certainly not. The opposite is true,” the company said. “We classified Ms. Njoki as a good leaver. The company never threatened to revoke her shares or change her leaver status — and could not have done so once she exercised her options to purchase her shares, which she did immediately upon leaving M-KOPA.”
The ethical capital question
What makes this suit sensitive is the profile of the investors involved. BII, a UK government-owned development finance institution (DFI), and GIM are not just large funders; they market themselves as ethical capitalists. BII is mandated to support equitable development in emerging markets; GIM said it’s driven by long-term sustainability and justice.
Both firms sit on M-KOPA’s board, giving them influence over decisions like capital structure and equity allocation. The petition claims they used that influence to insulate their positions and reinforce control, even as staff of African descent were sidelined.
M-KOPA’s top investors are recognised for advocating fair and inclusive economic development in Africa and other emerging markets. Yet the petition alleges these same investors were protected from dilution during the 2019 restructuring, even as local staff lost out.
“This legal action is between the plaintiff [Njoki] and the company [M-KOPA Holdings]. The claim is being defended and the allegations are false,” a BII spokesperson said.
While Njoki’s filings stop short of accusing the directors of directly ordering discriminatory outcomes, she argues that board meeting minutes from April 2019—where members discussed shielding preferred shareholders from dilution—enabled unequal distribution.
“We do not support discrimination of any kind. We believe the allegations are without merit,” GIM said.
The timing of Njoki’s case is no coincidence. As VC pulls back across Africa, and startups turn to down rounds, recapitalisations, and secondary sales to extend their runways, questions about who gets to cash out are becoming louder.
Njoki alleges in court that M-KOPA carried out a “sham recapitalisation” in 2021, deliberately lowering its valuation to give Growth Shareholders a larger share of equity. A valuation report filed in court compares M-KOPA’s internal figures to those of rivals like Tala and argues that the company selectively used data to support a lower price.
“The Valuation process was therefore just a smoke screen to provide false validation to the Anti-dilution Plan and the appearance of an independent process,” Njoki said.
“M-KOPA Articles of Association do not provide clear guidelines, therefore making it difficult to allocate liquidation value and therefore making the waterfall used in 26 the recapitalisation complex, opaque and providing cover for the Anti-Dilution Plan.”
M-KOPA dismissed the claims as baseless.
“It is spurious, misleading, and unfounded,” the company said. “M-KOPA has comprehensively responded and has provided categorical evidence in support of its position.”
For four years, the Financial Times has featured M-KOPA as one of the continent’s fastest-growing companies. It pioneered pay-as-you-go solar and mobile financing in Kenya. However, internally, Njoki argues, the company has prioritised protecting investor returns and expatriate careers over those of local employees.
The company wants the case dismissed because it belongs in UK courts, not a Kenyan employment court. If the judge agrees, the case could be dismissed on jurisdictional grounds, leaving questions raised by Njoki about investor power and racial fairness unresolved in Kenyan courts.
However, if the case proceeds, it could set a precedent for how employee equity is handled and how local courts view the responsibilities of global investors and holding companies operating in the Kenyan market.
Mark your calendars! Moonshot by is back in Lagos on October 15–16! Join Africa’s top founders, creatives & tech leaders for 2 days of keynotes, mixers & future-forward ideas. Early bird tickets now 20% off—don’t snooze! moonshot..com
