By David Himbara
It is reported by Bloomberg Law News (https://new.bloomberglaw.com) that the Rwandan government is suing L.E.A.F. Pharmaceuticals LLC and its founder/CEO Clet Niyikiza. Filed in Delaware Chancery, the United States, the lawsuit accuses Niyikiza and L.E.A.F. Pharmaceuticals of defrauding the Rwandan Pension Fund to the tune of US$40 million.
The story of Niyikiza and the Rwandan Pension Fund dates back to 2009. That is when General Paul Kagame ordered his finance minister and central bank governor to pour over US$22 million of Rwandan pension money into a startup company, Merrimack Pharmaceuticals, based in Boston, US. How do you risk US$22 million pension money into a startup company? Startups often fail – a startup is a business in the earliest stages of being established. But members of Kagame’s Presidential Advisory Council, namely, Micheal Porter and Micheal Fairbanks who were already invested in Merrimack startup, convinced Kagame that the company was a safe investment with future high returns. Part of the deal was that another member of Kagame’s Presidential Advisory Council, Clet Niyikiza, joined Merrimack as its executive vice president of development.
By 2014, however, Niyikiza had left Merrimack to form his own company, L.E.A.F. Pharmaceuticals LLC. Kagame and Niyikiza shared a fantasy in this new venture – Niyikiza and his L.E.A.F. Pharmaceuticals would transform Rwanda into Africa’s hub for research/development and pharmaceutical manufacturing.
Fast forward to November 2022. The Kagame-Niyikiza bromance has collapsed. The Kagame government is suing Niyikiza and L.E.A.F. Pharmaceuticals for failing to transform Rwanda into an African pharmaceutical hub, for which the government paid US$40 million of pension money. One key question remains – does the US$40 million include the original US$22 million pension money invested in Merrimack? Stay tuned.