Centum Investment Co., Kenya’s largest publicly traded investment group, fell the most in more than four months after saying companies that contribute 20 percent of profit lost a court case over taxes.
The stock slid for a second day, dropping 3.9 percent to 12.40 shillings by the close in Nairobi, the biggest decline since June 19. About 79 percent of the three-month daily average of shares traded.
Kenya’s High Court dismissed a case filed by four Coca-Cola bottlers in which Centum has invested, the company said Nov. 2. The units filed the case against the Kenya Revenue Authority over excise duty amounting to 5 billion Kenyan shillings ($58.5 million). The bottlers plan to appeal the ruling, Centum said.
“Investors’ confidence will be affected because they are still recovering from not receiving a profit warning before the full-year profit fell and these bottling companies account for 20 percent of their profit, which is significant,” Faith Atiti, an analyst at Nairobi-based NIC Securities Ltd., said in a phone interview today.
In June the company was fined by the East African country’s Capital Markets Authority for not issuing a warning before reporting a 48 percent drop in annual profit. Net income in the 12 months through March fell to 1.19 billion shillings, the company said June 19.