Kenyan party opposes privatisation of mobile firm
NAIROBI (AFP) — A Kenyan political party sought Tuesday to place on hold the privatisation of a lucrative tranche of shares in the country's largest mobile phone provider, citing mystery ownership.
The Orange Democratic Movement (ODM), due to join the government under a power-sharing deal, wants to block trading in Safaricom on the Nairobi Stock Exchange, due to start on Thursday at a price of five shillings (7.5 US cents or five euro cents).
"We want a delay (...) it raises many fundamental questions about the transparency of the whole plan," ODM secretary general Anyang Nyongo told a press conference.
Up to ten percent of Safaricom is held by Mobitelea, a company registered in the offshore tax haven of Guernsey and whose owners remain unknown despite an investigation by Kenya's investment watchdog which has involved Britain's Serious Fraud Office.
When Safaricom was set up in 1999, the Kenyan government of the time acquired 60 percent of Safaricom while partners Vodafone controlled 40 percent -- with Mobitelea's cut only coming to light in recent press reports focused on the flotation.
"The ownership of shares worth in excess of five billion shillings in Safaricom, by Mobitelea under circumstances that have never been made public and which appear to have been made otherwise than as a 'true investment' by the owners of Mobitelea, poses the danger that these 'ghost owners' will now be unjustly enriched," Nyongo warned.
The Initial Public Offering (IPO) involves the sale of 10 billion shares, representing 25 per cent equity, which values the company at 200 billion shillings. It is expected to raise 50 billion shillings (750 million dollars or 500 million euros).
Safaricom is the most profitable firm in east and central Africa with 2007 pre-tax profits standing at 370 million dollars.
The major competitor for Safaricom is Celtel, operated by Celtel International and a Kenyan partner, Sameer Group. A third licensed company -- Econet Kenya, a subsidiary of southern Africa giant, Econet International -- is expected to join the market in July.
