Monthly Archives: October 2009

Youthful Tantrum

The saga at the Youth Fund continues at the board hit back at the Minister of Youth Affairs for ‘re-appointing’ the ‘previous CEO’ to his previous post. And the nightly news have duly shown two CEO’s show up at the Fund office, each claiming authority to run the Fund – one backed by the Board of Directors, one sacked by the Board (and reappointed by the Minister)

For a month now the CEO has had the upper hand in the media making rounds that he had single-handedly stopped the Fund from engaging in a financing deal with Canadian group Enablis – one which the Fund would have been better served by channeling these funds through local commercial banks

Now the board has hit back with a hard-hitting statement giving reasons why they had fired the CEO including that he was insubordinate, misused resources (over-claimed imprest, attend training for fun), took trips to his distant home in northern Kenya under the guise of making official trips in his government allocated car), inflated procurement contracts, among other things.

The government inspector appears to agree with the board in most of the allegations against the CEO; but their recommendation is also curious: they don’t say the CEO should be sacked, instead – “…the audit team noted the board had lost faith and trust in the CEO and that they cannot continue to work together as a team. The only prudent action by the minister is to separate the two.”

This brings to mind a similar stand-off a few years ago at Consolidated Bank of Kenya where the Board said the would not renew the contract of the CEO and asked the Minister to appoint a new CEO. However the cards were flipped on the Board and they were all sacked, while the CEO was re-appointed to a new contract

This time around the stakes are different. The board appears stronger and the Minister not as powerful; in fact, she is under siege from her own assistant ministers and the Board who used comments against her this week in the media including ‘lying, crying, comical’. So how will this one end? How should it end?

Rules for Kenya Internet Trading

Continuing with the pace of more regulations to strengthen the securities industry in Kenya, the capital markets authority (CMA) has availed at their website even more draft regulations for public discussion that cover internet trading, disciplinary actions, takeovers and licensing. In addition to those rules for public offers they have;

Internet trading
– Kenyan organizations or those which target Kenyan investors need CMA approval
– Source of platforms: they may own, gets from eth exchange (NSE) or use other platforms if CMA approves.
– Those who already have should re-apply – licenses are renewed annually, and are canceled automatically if one stops being stockbroker, network or exchange
– All platforms should Ensure confidentiality, safety of data (no manipulation, virus etc), back up plan, maintain audit trials Encryption and firewalls, Prevent duplication of orders
– Stockbrokers can sponsor chat rooms
– Traders to Report monthly on number of users, transaction averages, and system downtime

Disciplinary Processes
– Proposes creation of disciplinary committee that follows civil law e.g. sharing of evidence, call witnesses, cross-examination
– Committee can warn or censure firms or persons or can suspend or revoke licenses

Take-overs (intended to sort out carbacid-type deals)
– Board of company being targeted for take over must hire an independent financial adviser
– Offeror to make public announcement, if there’s unusual movement in target company share price
– No withdrawal of offers unless the CMA rejects it; also the target company has 3 weeks to decide
– If takeover fails, have to wait at least 12 months before making anther attempt – specifies format of takeover documents and reply documents to be filed with the authorities

Licensing (for securities exchanges, stockbrokers, investment advisors)
– Stockbrokers (share cap 50 million or~$670,000) to disclose their information technology, and comply with ration for overdrafts, borrowings
– Agents can only work with one stockbroker, and may not handle client funds
– Dealers (share cap 20 million or $267,000) to disclose their information technology, and comply with ratios for overdrafts, borrowings and investment portfolio liquidity
– Investment advisers (share cap 2.5 million or ~$33,000) their portfolio may not exceed Kshs 10 million ($133,000) otherwise may have to become fund manager to handle larger business
– Fund managers (share cap 10 million) and Investment banks (share cap 250 million) must also disclose their information technology, and comply with ration for overdrafts, borrowings

send comments to ceoffice@cma.or.ke

Pesapal goes Live

I first heard about Pesapal, from founder Liko Agosta, at the September Nairobi skunkworks forum.

In a country (and region) where the mobile phone is, next to cash, becoming the preeminent means of small business payments, Pesapal which will enable Kenyans to pay online via mobile phones (Safariom’s mpesa or zap from Zain) for products and services from vetted merchants, is a timely e-commerce platform – that conveys benefits for both merchants and buyers.

For buyers/customers, Pesapal pre-screens and vets the vendors, which gives comfort to them in terms of them being wary of transferring payments for services which may later not be rendered, or goods not received.

For merchants/ business people, Pespal, which comes with a readily available API and pre-built components, saves them the hassle and cost building e-commerce websites to advertise their goods & services, or receive payments; they simply sign up with pesapal, track orders, and get payments/transfers into their bank accounts.

Here’s a great Pesapal review from White African.

White elephants never go extinct

stairway to heaven
The last few years has seen white elephants disappear from the scene, as seen in defunct projects that have stalled, and died and are condemned to ridicule. They dot the landscape in towns and rural areas and are seen as monuments to changing global trends, poor planning, bad management, government pork, largesse, populism, toxic corruption etc.

Properties lie dormant for years, idle, and then every few years, someone comes along and picks up a white elephant carcass and revive, breathes life back into it; sometimes its the government and sometimes its the private sector, foreigners, other entrepreneurs who come along and say; that “it was a good idea, but it was executed wrongly ((e.g. the Numerical Machining Complex is something every industrialist talks about but is forever condemned because it was associated with the Nyayo car), this time we’ll do it correctly” – and they throw in some cash, put a coat of paint, sometimes tear down white elephant carcass, re-open a factory or hotel, put on a new coat of paint, add a production line, change the public image etc. And things change for a few years in the revived area.

But it’s a cycle of up’s and down’s – and when one year something is revived, somewhere else something is going bust. This week as there are plans to revive Panpaper, down goes the Kenya planters coffee union (KPCU) and numerous dams built for water conservation at apparently inflated prices.

So white elephants will never die; as long as you have dreamers, entrepreneurs, go-getters, leaders with bad intentions, crooks who default – but mostly by people who say it can be done! Sometimes they are right and we applaud and revel in their success, but sometimes they are wrong – and more white elephants are born.


recent pics of a few

Idea Exchange: Local Techies

The last Nairobi skunkworks forum introduced me to a couple of interesting local companies, so let me add some more to the list.

From the mail-box are recent pitches from local companies, some of which I’m interested in, some I’m experimenting with, and others I am yet to check out – check them out, give them a try, hare comments, and learn about more these local tech companies

1. From Nigeria comes UBA Bank, Just licensed in Kenya, the one bank (other than stanbic bank (SA) that has embraced new media tools for communications such as marketing, customer service and investor information – has a twitter account, facebook group, (even an Arsenal FC fan page) and are very responsive to online queries; will any Kenyan bank step up and match that?

2. Also from Nigeria is Text2fly a mobile service that lest your search for flights putting a travel agent in your mobile phone. Not flown much of late and next flight is likely to be local, but I’d personally be interested in a service that lets me know what’s available, – like Kenya last minute see 10.

3. Uzanunua bills itself as a a cost effective way for Kenyans to buy & sell goods through online auctions e.g. cars, property

4. Freeview is a basic free digital television service, with no monthly fees
5. Webpesa is a local ad revenue generator for local blogs and publishers, a local adsense that allows small payments .e 500 shillings by m-pesa or zap, a fraction of the $100 adsense cheques.

6. The Strawberry Store is a web store for gifts, furnishings and accessories that brings IKEA to your door step

7. Ignite has new workshops series for October and November that cover mentoring, networking, negotiation and other skills at affordable package for entrepreneurs

Those I know

8. Book Villa I’ve been a members of this book club for a couple of years – and for 2,000 shillings (~$26) read all the fiction and non fiction books (borrow & return two at a time) you want to.

9. Mamamikes reminds you that Kenyan kids are about to undertake primary and secondary level final examinations and how you can send the gift packages for motivation and luck.

10. Kenya last minute has last minute travel offers for harried workers in need of an instant vacation and includes disounted hotels, air tickets etc.

11. I’ve just joined Zuqka which is the brain child of Kahenya. If I describe it as a local facebook/magazine/TV platform, what would Kahenya call it?