SAFARICOM-THE LAST WORD 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.