Monthly Archives: June 2005

Kisumu Rural has Kenya’s first constituency web site

Once you get past the header (that looks like an error), you’ll find an unbelievably good page – with info. on constituency leaders, campaigns fund, news & views, a district profile, tourist attractions, projects, demographic characteristics, socio-economic profile, HIV/AIDS constituency campaign, development fund and harambee funds etc. It also links to other sites, has an online forum and gives a full breakdown on how the 6 million shillings CDF funds and harambee funds (1.9 million) will be used.

This is likely to cause a stampede as other MP’s, flush with CDF cash, rush out to build the jazziest sites seen in Kenya, reminiscent of the mid-90’s when every company in the world was determined to build the biggest and best web site.

Hon. Prof. Peter Anyang’ Nyongo, (M.P.) is way ahead of his time. Can we just elect this guy president tomorrow? (Hat tip to the Standard 20/6/05 – not online)

Safaricom’s future?

There’s no slowing down the Nation’s Jaindi Kisero, even after he moved on to the East African. He reveals that Vodaphone has offered to buy 11% in Safaricom for $100 million to give them a majority 51%.

His commentary is naturally back in the Nation today where he points out that the offer is unlikely to receive a positive response from the Government amid complaints of how a “Kenyanisation” programme for key positions in Safaricom, which had been spelt out in an agreement at the company’s inception, has been ignored and how the company has a high expatriate dose. (is this (i) another Broken MOU, this time by Vodaphone or (ii) a move to force out top expatriates at Safaricom or (iii) a final FU to Sir Edward Clay?)

No more Golden handshakes

Chris Rock used to joke that Black people should get their pensions at age 30 because they have a lower life expectancy than Whites and never live to retire at age 55.

The new Retirement Benefits Act was the talk of the town last week as it had some stunning revelations. It was revealed that retirees would not get most of their pension until they turn 55 – they can only access what they contributed, which is in many cases only a fraction of the employer’s contribution.

It was shocking that this decision was made as there are about to be a number of retrenchment packages e.g. at Kenya Railways, Telkom and Kenya Ports Authority. Previously retrenched employees walked away with some nice payments packages – golden handshakes – and invested in restaurants, buildings, matatus or other businesses (and of course, others drank/wasted the money away)

No more Metro Shuttle

The popular metro shuttle is no more and there are no more lines of faithful passengers queuing at Kencom House for travel to Karen, Lavington, Westlands, South B, JKIA and a few other destinations. General Motors Kenya has impounded 83 Metro Shuttle, Msafiri and KBS vehicles while financiers ICDC Corporation and Imperial Bank have claimed another 30 and 4 more repectively, following the failure of KBS to pay some major bills with these creditors.

KCB AGM

Kenya Commercial Bank held its AGM at KICC on Friday June 17th at KICC. Started sharp at 11 a.m., after registration and handing out of umbrella’s and meal vouchers to shareholders. But there were some timing issues that affected the meeting. After registration, got my gift umbrella

Chairlady?
Susan Mudhune was referred to as Chairman throughout the meeting, without any awkwardness. This must have been an issue before, but not anymore as there’s no discomfort with the term. The Swahili translation of her title is appropriate ambiguous “mwenye kiti” (owner of the Chair) Kenyans will have to confront these issues in future with job titles such as fireman, linesman.

2004 Performance
Mrs, Mudhune introduced the Board and gave a speech on the bank performance and invited Terry Davidson, the Chief Executive who also gave a more added more depth to the operations of the Bank up to December 2004, and how it has performed halfway into 2005, HIV, anti-corruption training etc. They also invited an official of Suntra Investment Bank to explain aspects of the electronic share trading (CDS) However their combined speeches ran for an hour and it was 12 noon by the time the Company Secretary read the notice and formally convened the meeting.
After the company secretary, and recognising some uneasiness, the MC announced that they had plenty of food for all shareholders

During 2004 the Bank’s EPS went from 3.06 shillings per share to 3.94 and share price increase from about 54 in December 03 to 64 in December 04. However the most significant event for KCB (and perhaps the entire banking sector) in 2004, was its successful rights issue in which shareholders were invited and bought new shares in the bank – raising about 2.3 billion shillings for the banks operations, expansion and improve its compliance with banking regulations following heavy provisions and losses a few years ago. Dividend payout was 3%, which was comparable to Kenya Airways 3.3% according to the CEO.

As a result of the hour-long introduction, the Chairman was forced to take only a limited number of shareholder questions, leading to some angry exchanges. Still they led to some vital information coming out. Examples:

– Government will divest from KCB and all banks and parastatals, as it recognizes that its mandate is to provide services. Their 26% share in the Bank will be sold to private people in “the best interests of the Bank.”
– The Bank is hiring a No. 2 or Deputy CEO who will be in charge of strategy, marketing, research, subsidiaries and regional operations. Also KCB has changed from geographic management structure to a functional one and also implemented balanced scorecard and performance management system.
– Kencom house will revert to the Bank following an out of court settlement. As a result of this, the Bank’s pension fund is now in a surplus – and will now consider changing from a defined benefit to a defined contribution system. However this will only affect current staff of the Bank.
– Western Union money transfer is now available at 10 branches, and will be at 36 by year-end.
– The Bank has the largest ATM network in Kenya (87) and will increase to 119 by year-end. The 350,000 Quickserve ATM card users can also use their cards as debit cards at major shopping outlets
– The Bank refurbished 35 branches at a cost of about 500 million and will complete about 45 more. This makes one wonder about Kenya’s Parliament refurbishing one building at a cost of 800 million shillings
– Abandoned a new (and controversial) IT system, and instead upgraded their existing one
– Operating expenses increased by 1 billion – all due to the increased cost of doing business, such as processing 70,000 new loans in 2004.

Ownership
– Government is the largest shareholder of the Bank with 26% (52 million shares) followed by ICDCI (5%) and KCB staff pension (4.55%), and NSSF (3.8). Bank Director Sunil Shah is the largest individual shareholder with 2.3% – from 4.86 million shares. At one dull point of the AGM, I calculated my dividend payment (Kshs. 2,533) and that of Mr. Shah (Kshs. 9,234,224)

Director Elections
It was announced that two sitting directors, William Gitobu and Francis Ojany, would not seek re-election – so there were 4 director seats being contested, by 9 applicants. Election ballot forms not been handed out, and were quickly dished out as candidates spoke stating why they should be elected director. I predict that the new directors will be Joseph Kinyua (Treasury Permanent Secretary), Susan Mudhune (current Chairman) James Koome (ex-UNGA) and Joseph Adongo (ex Kenya Airways) as (I believe) they enjoy the support of the Government (largest shareholder by far) and the other 5 candidates will have no chance despite their passionate speeches. The Bank’s auditor Ernst & Young supervised the election portion of the AGM and results should be out by Tuesday.

Lunch
It was now past 2 p.m. and shareholders stood to deposit ballots in voting boxes, and then immediately proceeded to line up for lunch at the ends of the hall. Despite repeated calls that the meeting was still on and that they should return to their seats, the sight of some shareholders already eating discouraged others from sitting down. IMHO the meeting was over so I took my lunch box (cold roast chicken, potato cuts, bread bun, banana and some fruit and soda – and went back to office, as another representative of Suntra stocks explained more on the CDS.