Wednesday, August 01, 2007

Still the Bitter Option

Now that Safaricom shares are set to make their debut on the Nairobi Stock Exchange, has anyone cleared the air over the ownership of, and relationship between, Safaricom, Vodafone Kenya Ltd. and Mobitelea? Or is this one of those issues that Kenyans love make a lot of noise about and then promptly sweep under the carpet?

Here are the issues I would still like addressed:

However, the government insists that there are only two shareholders of Safcom i.e. Telkom Kenya (60%) and Vodafone Kenya Ltd (40%). According to the East African, Mobitelea Ventures Ltd. was, at least till 2000 a non-trading arm of Telkom Kenya. It appears that sometime between March 2001 and May 2002, Mobitelea acquired a stake in Vodafone Kenya Ltd. (which by then was wholly owned by Vodafone Plc) . This implies either of two things.

One, that Telkom, through Mobitelea and using public money, bought shares in VKL thus increasing its effective shareholding in Safaricom to 70% without informing the public. It then sold the equivalent of 5% of that shareholding back to Vodafone Plc generating $10 million and again failed to report this. It would also mean that contrary to its declarations, Telkom actually effectively owns 65% of Safaricom and is trying to hide that 5% from us.

Or two, Telkom had by then quietly sold (or given) Mobitelea to someone who then managed to convince Vodafone Plc to sell them a piece of VKL on the hush-hush. This begs many questions. Whom did Telkom sell (or give) Mobitelea to (last year a search at the Company Registry conducted by The East African failed to determine the ownership or directors of Mobitelea Ventures), why and for how much? Were the proceeds declared in the company's accounts? Can Telkom so easily dispose of a public asset without informing anyone? Why doesn't the company come clean on this matter?

Isn't there a contradiction in Safcom CEO Michael Joseph refusing to divulge the details of Safcom's ownership structure to Parliament's Public Investment Committee, while at the same time seeking to access more of the public's money through a listing on the NSE? And do the rules of the NSE not compel him to release that information now?

What has become of the PIC Chairman Justin Muturi's promise to get to the bottom of the affair?

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