Tuesday, August 28, 2007


I blogged on this issue last November.I notice its been the top content on this blog ever since.It never leaves the top 10 list.After many comments on my blog i.e. Patriotic Kenyan,Gathara and many others, i give you my final thoughts on it in a Q & A format.

How many shareholders does Safaricom K Ltd have?
Two,-Telkom(K) Ltd(60% of Safaricom) and Vodafone (K) Ltd(40% of Safaricom).

What about Mobitelea?
Mobitelea is a shareholder in Vodafone(K) Ltd which is a Private Limited Company.

What about Mobitelea's stake in Safaricom?
Its an Indirect stake, Mobitelea owns 12.5% of Vodafone(K) Ltd while Vodafone Plc holds 87.5% of Vodafone(K) Ltd.Vodafone(K) Ltd main asset is the 40% shares in Safaricom(K) Ltd.
If you take 12.5% of 40% you get the 5% indirect stake Mobitelea has in Safaricom.

How was business was done in the Third World during the 20th Century?
In those days there were no worldwide Mergers and Acquisitions firms,lawyers or clients to perform proper due dilligence and show you the ropes.Think Morgan Stanley,Citibank,PWC and lately Rennaissance.Most firms were based in the WEst and 1 or 2 Asian Capitals i.e. HongKong and Tokyo.Mumbai was the name of some exotic perfume.

If you wanted to take over a local firm or go into a joint Venture with a Third World Government,you allied yourself with a local political operative and he did the 'due dilligence' opened the right doors and he got a stake in the new firm as his Partnership contribution.

If you doubt me just look at the list of top civil servants and politicians of the 1960s Kenya and compare that with their business interests.

Why the IPO must go on
The Safaricom IPO will ignite significant foreign interest that will grow our markets and put Kenya in focus of all the top markets.The market Growth will create more jobs for everyone and grow the economy.

If we stop the IPO we can get back Mobitelea's stake
Ha, Not a chance the Mobitelea stake is parked in a private company Vodafone(K) Ltd.Government cant interfere with private property that is unconstitutional
Let me put the point across using a story:
There was once an old mzee who had 10 acres of land.He sold 4 acres to his Best Friend.The Best Friend then sold 1 Acre to a stranger the Mzee didn't like.The Mzee wanted that particular 1 Acre(that was sold to the stranger back).Do you think he got it ?

This is unfair Mobitelea's owners are getting away with free money
Life is unfair that why some people have first class degrees and are clerks while others have Certificates and are millionaires.Thats the case whether in USA or Kenya.
Apparently,this is the crux of Muthoni Wanyeki's Article in this week's East African.I respect Muthoni and she is one of the people i admire but i doubt her capacity to look at the big economic picture.
This is the best time to list Safaricom, you can never wait for the best time to do something..that time may never come.

What about the Privatization Act 2005?
It gives the Minister of Finance the power to Gazette it and decide when it shall come into effect.By the way Laws are never applied RETROSPECTIVELY.Do you know who the Minister of Finance is?
I rest my case.


coldtusker said...

True lakini wizi...

Patriotic Kenyan said...

A small axe to the Safaricom IPO
I am not the daughter of a Big Man. Neither am I married to a Big Man — or even to the son of a Big Man.

I had the good fortune to have essentially middle-class parents who worked hard to give my siblings and me a good basic education. And I had the good fortune to have a mother whose citizenship made it possible for me to attend university, courtesy of the student loans system of her country.

The student loans covered fees and accommodation. But my parents couldn’t afford to send us much money — getting $100 on birthdays and at Christmas was like getting a windfall. So I worked to supplement the student loans, from the time I left Kenya at the age of 16.

Of course, I now recognise that, despite not being associated with a big man’s family, in comparison with the majority of people in Kenya, I am not only fortunate, I am actually extremely privileged.

But, despite that recognition, having worked since the age of 16, I also know the value of my money. I have worked for what I have. This is why, for instance, I get apoplectic with rage about corruption.

Under Kenya’s ridiculously constructed tax brackets, I fall into the same top tax bracket as Kenya’s Big Men. And I get nothing for it, having to pay privately for everything—including security where I live and medical insurance. But, my privileges taken into account, I certainly wouldn’t mind paying the amounts of tax that I do pay if I felt the money went to help those with fewer privileges, not to pay the obscene salaries of those who cannot be bothered to assure the House of a quorum sufficient to pass even 10 Bills a year — or to build the “bigness” of the Big Men.

The other night, some friends and I calculated the share of Safaricom’s reported Ksh17 billion ($253.7 million) profit that would have gone to Mobitelea — the company that, according to the Public Investments Committee, is irregularly in possession of no less than five per cent of the mobile phone company’s shares, meaning that there are apparently no records of Mobitelea having paid for that shareholding.

MEANING THAT MY TAX MONEY, which went into building and sustaining Telkom and Safaricom, was essentially given away. Meaning that, coming back to our calculation, the alleged owners of Mobitelea — the son of a Big Man and the son-in-law of another Big Man under the former regime and a Big Man in this regime — earned themselves no less than Ksh850,000,000 ($12.6 million) last year alone. From doing nothing at all, except live off the profits of having stolen from us. Ksh850 million off my back (and your’s as well). Again, I am incapacitated with rage.

And yet, the Treasury insists that Safaricom’s initial public offer will proceed, regardless of the outcomes of the PIC debate within the House or any court cases that might ensue.


FRANKLY, DESPITE OUR NEWFOUND fascination with IPOs, I don’t think a single one of us should put a single shilling forward. Those of us who do work hard and honestly deserve better. If shares in Safaricom could essentially be given away to Big Men, their sons and sons-in laws, then they can be given away to us. Why should we pay for them? They’re our property in the first place, which the government was meant to hold in trust for us. If it breached that trust for three of us, then it should share the love with all of us.

It might not seem like it, but there are, in fact, victims of corruption. Those victims are you and me — every single Kenyan who dutifully pays his or her taxes. I’m furious. I’m ready for a tax boycott — the residential associations led the way and it’s time to scale up their efforts. We need to say to hell with that IPO until the issues raised by the PIC have been satisfactorily dealt with. We need to be the “small axes” that Robert Nestor Marley talked about and cut down all those “big trees.”

L. Muthoni Wanyeki is a political scientist based in Nairobi

Anonymous said...

Very well said Pesa. L. Muthoni, I work hard and I've saved S@£$t loads to participate in the IPO. I can't get angry and let an opportunity like this pass me...NO...NEVER. Im gonna buy like mad and hope this is the one that gives me the home run.

alexcia said...

How about we find out WHO the owners of Mobitelea are

Ask them nicely to return the money, if thet don't throw them in jail

How about that?

mmnjug said...

Still, the ownership of Mobitelea is is very well orchestrated such that to fix them calls for real legal minds. Its Mungai Kihanya the Sunday Nation genius who brought this to my attention. That its an indirect ownership, not direct like Telkom or Vodafone. Brainy, huh?

click to http://assidous.blogspot.com

ka-investor said...

We have been robbed - indirectly- and i don't think we can just look the other side and proceed with the IPO. Unless you are getting into Safaricom as a short term speculator, i don't see what warrants the hurry. 'They' are worried that if power changes hands next year they will be investigated and they want we minority shareholder to make noice when this happens. I'm not ready to die for 'anyone', are you?

ka-investor said...

We have been robbed - indirectly- and i don't think we can just look the other side and proceed with the IPO. Unless you are getting into Safaricom as a short term speculator, i don't see what warrants the hurry. 'They' are worried that if power changes hands next year they will be investigated and they want we minority shareholder to make noice when this happens. I'm not ready to die for 'anyone', are you?

Anonymous said...

Well, if Kenyans do not wish to participate in this IPO, foreigners alone will oversubscribe it 3 times. There is alot of filth in the whole Mobitelea indirect ownership but under law, it will be almost mission impossible to do anything about it. So why not get yourself a share, no matter how small it will be?

J K said...

Good points Pesa. I have gotten a hoarse voice trying to drive similar points home in other blogs. Mobitelea a major con? maybe. Chances of reversing it? Tending to nil. Way forward? Count our losses and run the IPO now not later.

Patriotic Kenyan said...

pesa tu, your story has now changed, you used to say that the whole mobitelea thing was all legit, now you claim that its technically legit. Bullshit,if Kibaki is serious about it, he can get our money back. But guess what, he has the main perpetrators(Moi,Biwott) on his side.

I guess you continue to support this Mobitelea issue because you being a kyuk, you see not evil,hear no evil.

Anon 1 said...

I agree, Pesa Tu, you've lost all credibility for supporting this blatant corruption, eti life is unfair, so I guess we should also let Mungiki take over Central province coz life is unfair. What's your take on Kroll's report on Moi's stolen billions, let me guess, life is unfair so let Moi,Kibaki,Biwott and the whole lot contunue to steal from us.I used to respect you but no more, you're no different from that Alfred Mutua sychofant(at least he gets paid to lie and kiss ass)

ka-investor said...

Hey guys lets not loose the point here - which is to get the best way to get to this mobitelea cons - lets not get too personal, it prempts the discussion.

Patriotic Kenyan said...

Pesa Tu has been vigorously supporting these Mobitelea crooks like he's on their payroll or something. I can understand if illiterate folks in the countryside kept re-electing Moi despite stealing billions from us while running down our economy. But when support comes from supposedly literate internet generation like Pesa tu, then i feel sory for Kenya's future. You should go to Mashada and see how our 'future leaders' are falling over heach other to support Moi's corrupt past.

Talking about the best way to get mobitelea, wikileak just came out with the Kroll report on Moi's stolen billions. Now that's a patriotic Kenyan using the internet to good use. Now i know Nations Newspapers is in Kibaki's pocket so dont expect much from them,we have to continue to raise a stink on all this untill mwananchi forces Kibaki's hand or votes him out.

pesa tu said...

@Coldtusker: Its painful i dont like it anymore than u do
@patrioticKenyan: u r a semi-literate tribalist.You brand me a kikuyu just because i hold a divergent view.
All i'm trying to put across is YEs, something fishy could have happened.BUT do u think we have the capacity to get to the bottom of the matter?
An attempt to get the Mobitelea stake is LEGALLY difficult ,will cost millions of US Dollars and will detract us from more urgent problems.
Do u think ABRAMOVICH and other Oligarchs made their money 100% without controversy?Buyt the cost of taking their holdings away would detract RUSSIa from taclking more pertinent issues and deviate them from the goal of developing the nation.
The longer we delay selling SAFARICOM the more likely a more disruptive TECHNOLOGY will arrive and make cellular Networks useless/cheap.For instance, Wi-Fi enabled cellphones are available.Assuming me and you have one and we both a e at Wi-Fi hotspots anywhere in the world we can theoretically call each other on SKYPE or any other VOIP programme for free(at the cost of an internet connection only)No need for the ol' GSM network.

You can be sure whatever we get for Telkom Kenya at the end of the day we would have got double had we sold Telkom K 6-7 years ago.

pesa tu said...

@mmnnjuG: Dont want to blow my own horn But i said what Mwangi is writing about last November.
@ Jk and Anon:true that
@Kainvestor:Lets make money and grow our country no body's perfect.Have u seen Western Multinational's are partnering with some of the oligarchs

@anon1 and Patriotic Kenyan: i read the Kroll report on the Net and i have to tell u it has an error or two hear and reads like a sensational expose,for instance on Pg 20 its authors confuse Telkom Kenya and posta kenya.

Patriotic Kenyan said...

Pesa tu, so you after reading the Kroll report, all you could come out with is that there is an error on pg 20!!!. What a bunch of boloney!. Again, you're just a Moi apologist and we can read through your shenanigans.

About Mobitelea, do you think privatization will stop Safaricom from being innovative? look what they've done in a few years yet they were not privatised. Also, you cannot tolerate outright plundering of our economy just because we dont want to be distracted. Your reasoning is so pathetically idiotic.Just look at what 24 years of Moi's plundering did to our economy, I guess according to you, we should just tolerate all this lest we get distracted.Goldenberg,Aglo-Fleecing,Mobitelea, and God knows what else, and its all good for you, what an imbecile.

Patriotic Kenyan said...

And you have the audacity to compare us with Russian mafias like Abramovic, is that our yardstick? Russia is barely democratic,has never held free elections, has no free press, was a communist state until the 90s.Please.

pesa tu said...

@alexcia:Ideally that would be the right thing to do BUT practically impossible to do.For starters, what law have they broken coz they took their share from VODAFONE K ltd. and NOT SAFARICOM.The VODAFONE K LTD stake was duly and prioperly given to them.Read the old man's shamba story.

pesa tu said...

@Patriotic Kenyan: What would you propose in the current situation?
Please refrain from the insults ,do give PROPER and WORKABLE propositions for anything i post

@everyone: Am NOT condoning any criminal/unethical Acts but we should look at any problems we have rationally.REVENGE and PAYBACK always lead to more problems than solutions.At independence had we sought to payback the wicked colonialists in their 'own' currency am sure we would never have had internal stability for the first 10 years of independence.

Patriotic kenyan said...

Pesa Tu, since corruption kills so many innocent Kenyans, the death penalty is the best anti-corruption strategy.

As for Moi and his sons, just ask them nicely to return the money.If they refuse, then sensence them to death. Once they realize that a dead person cannot enjoy the loot, then you'll see that money coming back. Hakuna kubembeleza hawa watu. The rate these people are plundering our country, we may just create a recipe for a revolution, where the 30 million poor go after the 30 billionaires and their supporters. So the best way to avert this is to give Moi and sons a chance to return the money or face the death penalty.

Anonymous said...

At the risk of being branded a govt. sympathiser I have to confess that after reading the Kroll report, I have not seen anything new in it. Infact, for a professional mzungu firm that was paid millions of £ to do a forensic job, I feel terribly let down. Just so you know they did a shoddy job, there is no mention of Mobitelea in the report. ha. Which brings me to the question ... if they did not even get to know of the existence of Mobitelea, then what were they (Kroll) doing? They must have made their report from press cuttings and rumours! I thinks even journalists can do better.

Ssembonge said...

I don't expect the government to act on Mobitelea. Not after this weeks vein threat to disturbing the peace by Moi while voicing his support for Kibaki.

IMHO, Moi is capable of plunging the country into chaos given his vast wealth and the support of his community.

And now that 4 years have passed, Kibaki lacks the credibility to go after Moi.

Rono said...

Ssemboge, Moi cannot do shit without the support of Kaleo so dont succumb to empty threats. Most kaleos realised that Moi looted their KCC etc and ate with Wahindi, so he will carry his own cross.

Anonymous said...

What a bad day to come out with a pro-Mobitelea post.i feel sorry for you because now you look like the biggest fool in blogosphere.

pesa tu said...

@patriotic kenyan: i SAID 'solutions within the law' not extra-judicial ones that make u no better than the perpetrators

@Rono: i see a political angle in this report's release

@Anon: This isnt a pro-mobitelea post.THIS IS A PRO-SAFARICOM IPO POST.I explained the MOBITELEA crisis to show how futile it would be to stop the IPO and waste time chasing the stake.The Moibitelea stake ISNT going away we can always get it back anytime.BUT the opportunity to put KENYAN capital markets on the World map is TODAY and SAFARICOM is viable TODAY, the opportunity is NOW.So regradless, of the other issues we MUST TAKE the opportunity TODAY

@Everyone:Looking at my post and the responses you can see why a few people can see opportunities where others only see trouble and danger.

Gathara said...

Whoa! I am late to the party! Anyways, I find your analysis to be somewhat warped. You acknowledge that there may have been shenanigans behind Mobitelea's acquisition of it's stake in VKL but you ask us to turn a blind eye to this. Just because it may be challenging to smoke out the rats doesn't mean we shouldn't try. After all, aren't we paying a certain justice Ringera 2M a month to do just that? Discarding wholesale the results of an investigation by an internationally renowned company because the report says uncomfortable things is no way to go. Neither is refusing the help of another sovereign nation in recovering our assets.

By the way, you neglect to tackle a fundamental question raised by the PIC. What prompted Telkom to shed 10% of our shareholding which it basically gave away to Vodafone Plc? Is it just a coincidence that the same 10% happens to find its way into Mobitelea's pockets?

Patriotic Kenyan said...

Pesa tu, of course we need an extra-judicial solution since 'solutions within the law' are all compromised.Why do you think Kenyans lynch criminals?, coz the judicial system is a farce.

Of course there is politics involved, why do you think Moi supports Kibaki? coz he adores his leadership skills? You're not naive to believe that, or are you? In these elections times, the court of public opinion overrides the legal mumbo jumbo. Its all about perception, so inasmuch as you continue to support Mobitelea(for God-knows why), the piblic knows who the culprits are.

You cannot root for Safaricom IPO and dissociate yourself from the Mobitelea scandal. May I remind you that Kenya Re was almost sold to Raymond Moi for Sh800m back in 2000 before PIC protested,and Nyong'o took the government to court. Arent we clad that the sale was stopped and now Kenya Re sold 40% of its shares for sh2.3Billion.

Again, what's the justification to process the Safaricom IPO right now when so many issues are pending.Any well-meaning Kenyan would be concerned about that. Unless one is a beneficiary of the government corruption, or a sychofant of the government, or plain stupid.The Kroll report just shows you the resolve of Kibaki in resolving any corruption, so what makes you believe that once the Safaricom IPO is done, that he will care to investigate? Then we have KACC and that idiotic Ringera, his main job is to cover-up for his corrupt friends, while we pay him 2.5 million a month.

The only solution is to create stiff penalties for grand corruption(death penalty) and charge all past perpetrators. Either this or wananchi will take matters into their own hands, just like we already do by lynching criminals.

pesa tu said...

@Gathara: True dat about the 10% but we can always do the IPO,then chase after the 10%( That stake aint going nowehere i.e. Vodafone aint relocating to Mars)
However, the PS Treasury is custodian of our Financial Assets and since, he isnt complaining sometghing must be right.

@Patriotic Kenyan: Do start a blog to vent your feelings u seem to have a lot of pent up anger, its only a blog.

@Gathara+Patriotic:To LEGALLY try to unravel the issue will take too long.Thats why i say we go for the IPO then chase the issue later.

pesa tu said...

@Gathara: True dat about the 10% but we can always do the IPO,then chase after the 10%( That stake aint going nowehere i.e. Vodafone aint relocating to Mars)
However, the PS Treasury is custodian of our Financial Assets and since, he isnt complaining sometghing must be right.

@Patriotic Kenyan: Do start a blog to vent your feelings u seem to have a lot of pent up anger, its only a blog.

@Gathara+Patriotic:To LEGALLY try to unravel the issue will take too long.Thats why i say we go for the IPO then chase the issue later.

Patriotic Kenyan said...

"the PS Treasury is custodian of our Financial Assets and since, he isnt complaining sometghing must be right."

That right there shows us your ignorance. So by the same token, since the relevant PS are not complaining about the Kroll report(Since 2004),Anglo Leasing,Goldenberg,Ndung'u Report etc, we should take it that something must be right? You are getting more ridiculous by the minute. Again, this is a case of SEE NO EVIL,HEAR NO EVIL. I'm done wasting time with you, but now everyone knows who you really are.

Dexter said...

I had much respect for you bwana but its all gone down the drain. Cut the PS not complaining crap. Nothing is right here. Can't you see???? If it takes 10 years to unravel the issue, then let it be. Whats the hurry for? I'm one very angry Kenyan who's fed up of seeing what is rightfully ours being stolen from us right before our eyes and its a pity people like you want us to sit back and watch.

Anonymous said...

The documents speak for themselves:


And indeed this IPO can be stopped in its tracks once authorities in other jurisdictions get wind of Vodafone's participation in aiding and abetting corrupt actitivies.

I'm sure the Vodafone CEO and Co. would not want to serve jail time for filing fraudulent US securities and exchange commission filings. If its not them, then they will have to clean up the mess and eat up the $100m+ loss they stand to suffer for which they will again be held responsible. There can be no escaping now that the cat is out of the bag.


Anonymous said...

O Brother, where art thou?

Anonymous said...

Prop nursing his wounds after a thorough thrashing by patriotic Kenyans.

pesa tu said...

@non: Nope, still here.I stepped back coz most of you were getting too emotional.Matters of social justice i leave to the mthoni wanyeki's of this world thats their bread and butter.

When it comes to finance i'm one of the best around when it comes to looking at the issues(Pun unintended).Am concerned with how LEGITIMATE a transction is than how fair it is'

This issue has been looked at by the Serious Fraud Office(UK) and given the zeal Western Prosecutors have am sure if it had violated FCPA in the states Srin(Vodafone MD) would have been charged by some Elliot Spitzer wannabe in the States .After all Vodafone has US listed ADRs

pesa tu said...

Have u noticed how none in the opposition even the Oppositons's leading ligths have avoided commenting on the Kroll Report?
Thats why i want us to list Safaricom then sort out the mobitelea issue later.Coz, it will be a long, slow and expensive process.
The best thing for Kenya on the issue of corruption would be a comprehensive AMNESTY+ RESTITUTION PROGRAMME. An economic truth and reconciliation Commission

Anonymous said...

Pesa, good to have u back. I'd call it "An economic truth and give us back our money and jail the thieves commission."

Patriotic Kenyan said...

Pesa Tu, what you are is a spineless coward.With that mentality, we would still be under the rule of wabeberu as 3rd class citizens in our own country. In your new post you mention how these same thieves that you support tried to swindle us over Kenya Re. To remind you, it was Nyong'o and co who stopped that in its track.Good thing is that your Kibaki is going down and all the thieves(Moi,Biwott,Saitoti,Kenyatta family,Patni,Murungaru etc) who now congregagate around Kibaki will be asked to return the money or face stiff penalties

pesa tu said...

@Patriotic Kenyan: Have u seen how much smut some of the guys in the opposition have?One of them even stole money for the All African games in 1987.So, whatever u r saying wont happen.
Concentrate on making yourself rich.

As usual u dont provide any new ideas.You just rant and spew threats.
Do start a blog so that we can follow what it is u r trying to elucidate

mali said...


patriot said...

Steadman Cooking up Numbers.

A casual addition of President Kibaki’s support per province as released on Friday then divided by eight (the number of provinces) showed that Kibaki had scored 39.5 per cent, Raila had 47.6 while Kalonzo had 8.5 per cent.


Presidential voting by province
Province Kibaki Raila kalonzo
Nairobi 46.3 39.3 12.1
Central 92.8 5.0 2.0
Coast 34.7 51.5 9.7
Eastern 48.9 6.1 43.8
Nyanza 11.9 85.3 1.8
Rift Valley 39.3 55.8 3.9
Western 20.7 72.8 1.4
North Eastern32.2 64.4 3.4
Total 43.2 43.6 11.4

Kibaki average: 46.3+92.8+34.7+48.9+11.9+39.3+20.7+32.2=326.8/8 = 40.85

Raila averages: 39.3+5.0+51.5+6.1+85.3+55.8+72.8+64.4=380.0/8 =47.525

The weighting has already been taken care of by using a representative sample size based on registered voters per province. The larger the registered population in a province the larger the sample size!

That means that the results can be deduced by simple addition and division in two ways:

1. Because the sample sizes have been weighted you can add the total number of votes of each presidential candidate and divide by the total votes to get the percentage of the candidate!
2. Because the sampling has been weighted you can add the percentage provincial totals of each candidate and divide by the number of provinces.