Former Capiter CEO Mahmoud Noah, who had been out of work since September 6 after being fired by the holding company’s board of directors, called an MBC Egypt story show to discuss the problem in his first public comments since the incident.
In a phone call with the show’s host, Amr Adib, Noah indicated that he is in regular communication with Capiter board members and that the rumours circulating about the startup are untrue.
Citing the sum of 33 million dollars, which is the worth of the funding that Kapiter got from a number of firms and investment funds in September of last year, Noah confirmed that the rumours that have been spreading regarding his escape and his brother are false.
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According to Noah, the $33 million was invested in Kapiter around a year and a half ago. He also emphasised that Capiter is held by the parent business in the UAE, and that it has more than 18 investors, including himself and his brother, who possess the largest percentage.
Noah did not dispute the fact that Kapiter’s present commitments exceed her assets, which indicates that the startup is truly in debt. However, he emphasised that they were not formally notified of the decision to dismiss them.
Noah gave the impression that the current worldwide financial crisis brought on by the conflict between Russia and Ukraine had an impact on Kapiter’s financial situation.
Dispute Between Investors And Founders Revealed As Cause Of Impasse
In a similar vein, the programme Hekaya, which is broadcast on MBC Egypt and presented by Amr Adib, explored the opinion of Mohamed Nagati, an investor and entrepreneurship expert, about the current Capiter crisis and its impact on the entrepreneurship sector and emerging companies in Egypt.
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Najati said that the problem at Kapiter was caused by a disagreement between the company’s founders and investors. However, the issue was not dealt with in the typical manner, and that there was not a single solution that was agreed upon to deal with it.
According to Nagati, the entrepreneurial sector in Egypt is transitioning from the stage of growth to the stage of “sifting,” which is standard in all emerging economies throughout the world. He also mentioned that it is typical for businesses to fail, liquidate their assets, and depart the market.
Nagati disputed that the Capiter issue will have an effect on the entrepreneurial climate in Egypt, which over the previous ten years has delivered Egypt a return of more than fifty billion pounds in US dollars and employed about one million Egyptians in its many sectors.
Regarding what will happen to Capiter after its crisis, Najati stated that if one of its parties is unable to come to an agreement to control the entire company, the solution will be an external entity that will take over the company and restructure it.
Founders Sacked And Replaced
In a recent statement (pdf) of the board of directors of Capiter’s holding company, Mahmoud Noah and Ahmed Noah were removed from their executive positions as Co-Founder & CEO and Co-Founder and Chief Commerical Officer, respectively, effective September 6, 2022.
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The Board of Directors had since appointed Maged Al-Ghazouli, Capiter’s Chief Financial Officer, to serve as interim CEO until Mahmoud and Ahmed Noah make a personal appearance before the Board, shareholders, and investors to address concerns from employees, suppliers, creditors, and other stakeholders, and to continue negotiations with the entity planned to merge with Capiter.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexpert