Kuramo Capital accuses Congo investment partner of looting plant

A Kuramo Capital Management LLC fund filed suit in Delaware, seeking to oust the manager of its investments in a Democratic Republic of the Congo palm oil plant over his alleged scheme to loot the business by restructuring a complex web of entities with overlapping ownership stakes.

 

Larry Seruma of Nile Capital Management LLC “has engaged in a pattern of stealing assets and opportunities rightfully belonging to Kuramo,” hiding his own “fraudulent or criminal activity,” and overseeing operations that “potentially could constitute criminal acts” under Congo law, the complaint says.

 

Seruma and Nile Capital didn’t respond to requests for comment Wednesday.

 

The lawsuit, made public late Tuesday in Delaware Chancery Court, concerns the control of Plantations Et Huileries du Congo SA, or PHC, a palm oil plant partly owned by a series of companies affiliated with Kuramo, Seruma, and two of his investment vehicles, Nile Global Frontier Fund LLC and KN Agri LLC.

 

The derivative suit targets Seruma, Nile Global, and KN Agri. It accuses Seruma of taking a $35 million Kuramo investment—earmarked to buy out a majority of PHC following its Canadian restructuring—and using it instead “to acquire the PHC interest for himself.”

 

He then “engaged in a wide array of wrongdoing that risks causing irreparable damage to Kuramo’s interests,” including signing contracts on PHC’s behalf and removing its board of directors, according to the complaint. Those moves allegedly led to fraud and criminal claims against Seruma in Congo.

 

Based on those breaches and Seruma’s “gross abuse of Kuramo’s trust,” the suit also seeks to foreclose on KN Agri under a $10 million bridge loan he has allegedly refused to repay.

 

The complaint was originally filed under seal April 15.

 

Cause of Action: Breach of fiduciary duty; breach of contract.

 

Relief: Damages, costs, fees, interest, an order “removing Seruma from all management positions,” and a declaration that Kuramo doesn’t have to cover his fees.

 

Attorneys: Kuramo is represented by Prickett, Jones & Elliott PA and Kleinberg, Kaplan, Wolff & Cohen PC.

 

The case is Kuramo Africa Opportunity Master Fund II LP v. Seruma, Del. Ch., No. 2021-0323, complaint unsealed 4/20/21.