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SAFARICOM SELLING SHARES

Published on March 29, 2008, 12:00 am

By Abiya OcholaPresident Kibaki rang the bell to kick-start the grand sale of Safaricom shares through an Initial Public Offer (IPO).

But his key ally in the Grand Coalition Government, Prime Minister-designate, Mr Raila Odinga, skipped the key function.

The undertones of an Orange Democratic Movement protest were evident as no member in the party hierarchy turned up for what would have been the first official public function officiated by the coalition partners.

The ODM boycott on Friday, after a protracted controversy, brought into sharp focus the firmness of the coalition government.

In the last few days, Raila’s lieutenants, Prof Anyang’ Nyong’o, Mr William Ruto and Mrs Charity Ngilu, have demanded that the Safaricom IPO, which will see the Government offload 10 billion shares worth Sh50 billion, be shelved until all outstanding issues are resolved.

But the President became one of the first investors in Safaricom after he bought one million shares worth Sh5 million at the launch.

At the same time, thousands of people queued to buy the shares, shrugging off calls for the IPO to be delayed until questions were resolved over the company’s ownership.

The Government is offloading a 25 per cent stake in the company. It holds 60 per cent in the firm.

The Government and Safaricom had denied the existence of a secret third shareholder, the subject of the controversy over the IPO. But the Safaricom prospectus showed a firm known as Mobitelea has a 12.5 per cent stake in Vodafone Kenya. The prospectus did not say who owned Mobitelea.

Kibaki, who noted the absence of his key partner, Raila, vouched for implementation of the National Accord.

“The implementation of the National Accord and Reconciliation Act will see a practical and sustainable solution to the challenges facing the nation,” said the President.

“Let us all remember that peace is the cornerstone of economic growth. We must jealously guard that peace and not use modern-day technological advancements like mobile phones to spread hate messages,” he said.

President Kibaki was apparently reacting to a short messaging service (SMS) going round on Friday, urging all ODM supporters to boycott the Safaricom IPO.

ODM had threatened to start a renewed wave of mass action to protest at what they termed schemes by PNU/Government to shortchange it in the Cabinet portfolio sharing, contrary to the accord.

“Let us join together in one political union that will serve as a strong foundation to address the economic and social challenges we face. Together, we will create one strong nation that stands tall in the family of nations,” said Kibaki.

Shun politicians Reacting to the ODM calls, Finance minister, Mr Amos Kimunya, urged investors to shun politicians casting aspersions on the Safaricom IPO.

“On this occasion, I want to ask Kenyans not to seek advice from politicians. Speak on your own behalf and speak to us directly and not through politicians,” he said.

He disputed claims that the IPO had been rushed to satisfy a clique of well-connected individuals.

“The IPO has been in the pipeline for over three years and we cannot test the patience of investors for long,” Kimunya said.

He added that the process had undergone all the requisite procedures including Cabinet approval and Parliamentary debate during the 2007/8 Budget Speech. It had also received approval from at least 50 financial, economic and legal advisers, both local and international, said the minister.

The shares sale at East Africa’s most profitable company will close on April 23.

Kimunya said over 100,000 Central Depository System accounts had been opened since March 14, showing the confidence Kenyans had in the share offer.

He refuted claims of a conflict of interest in the IPO, saying the shadowy Mobitelea was not a shareholder of Safaricom but Vodafone PLC.

The launch, at Kenyatta International Conference Centre, was colourful, with an acrobatic show against a backdrop of a state-of-the-art digital artwork. It was graced by the who-is-who in the corporate world of the Kenyan telephony industry.

Vice-President, Mr Kalonzo Musyoka, Information minister, Mr Samuel Poghisio, his PS, Dr Bitange Ndemo, Head of Civil Service, Mr Francis Muthaura, Finance PS, Mr Joseph Kinyua and the chairman of the Privatisation Commission, Prof Peter Kimuyu, were present.

Others were Safaricom chairman, Mr Nicholas Ng’ang’a, the company CEO, Mr Michael Joseph, Investment Secretary, Ms Esther Koimett, and Nairobi Stock Exchange chairman, Mr Jimnah Mbaru.

Joseph was optimistic that Kenyans would buy a stake in the company in large numbers, which posted a staggering Sh17 billion profit last year.

ODM also called off planned street protests.

But there was heavy security at KICC, with police in anti-riot gear stationed at vantage positions.

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About SG

Secretary general of Chama Cha Mwananchi. This blog www.chamachamwananchi.wordpress.com, is based in Sweden.

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