Late Kenyan tobacco tycoon Wilfred Murungi's Mastermind assets cleared for sale

Kenya's competition regulator has approved the sale of part of Mastermind Tobacco, the cigarette maker founded by the late Wilfred Murungi, to a company called Signature Leaf Limited, three years after the business collapsed into administration.

The Competition Authority of Kenya authorized Signature Leaf to acquire "certain assets" of Mastermind Tobacco (K) Limited, according to a notice published in the Kenya Gazette dated Oct. 2. The approval, signed by the authority's director general, David Kemei, was dated Aug. 21 and granted under Section 46 of the Competition Act.

The notice did not say which assets Signature Leaf is buying, how much it is paying or who owns it.

From BAT executive to cigarette maker

Murungi, an electrical engineer, founded Mastermind in 1987 after leaving British American Tobacco Kenya, where he had risen to technical director. He had earlier worked as an engineer at the Kenya Power and Lighting Company.

After leaving BAT in the mid-1980s, he first distributed locally made cigarettes in what was then Zaire, now the Democratic Republic of Congo. He then set up his own factory. Mastermind began production in Nakuru before expanding to Nairobi, and it launched its best-known brands, Supermatch in 1989 and Rocket in 1991.

Under Murungi, Mastermind became Kenya's second-largest cigarette maker after British American Tobacco, with about 1,000 employees. At its peak, it reportedly paid billions of shillings in taxes each year.

His business interests went well beyond tobacco. Through his Continental Group of Companies, he held stakes in distribution, marketing, communications, real estate and engineering, and he sat on the boards of several Kenyan companies and industry bodies.

A long decline

The company's troubles began before Murungi's death. Mastermind became locked in a long dispute with the Kenya Revenue Authority over reported tax arrears of about 2.9 billion shillings.

Murungi died on June 6, 2019, in his early seventies. Without him, the company sank deeper into debt and struggled with regulators. Production stopped in June 2023, and in December 2023, I&M Bank placed Mastermind under administration. About 1,000 employees lost their jobs, and the company's assets were later put up for auction.

The approval for Signature Leaf is one of the clearest signs yet that the business Murungi built is being broken up and sold. It also marks the end of one of the few large Kenyan-owned companies to compete with a multinational in the country's tobacco industry.

Kenya's cigarette market is now dominated by British American Tobacco Kenya, which is listed on the Nairobi Securities Exchange. Mastermind's fall left BAT with even less local competition, while the government has raised excise taxes on tobacco products in recent years and tightened rules on how they can be sold and advertised.

It is not yet clear whether Signature Leaf plans to restart cigarette production at Mastermind's former factories or to use the assets for something else.