Monthly Archives: June 2007

Ted Global Arusha

Mentioned earlier about being blessed/fortunate in life to see people like Michael Jordan (destroy Washington in their last game as the Bullets, though Scottie Pippen provided the winning dunk), Michael Schumacher (win the first US grand prix) and Tiger Woods (not enjoying his first US open). That all compares with being at TED Global in Arusha at which Kenya is well represented.

I will use this weeek to relax & learn from such esteemed speakers, participants, delegates, fellows and our Tanzanian hosts. (Read on who else is here, and what happened on Day 1 here, here, here)

Where’s Safaricom? Not met anyone here from the company whose M-PESA is touted by so many people (from around the world) here as a revolutionary enabler and an example of a means to empower millions by giving them financial accessibility & income earning potential

Madaraka Banking Week

The African Development Bank sets up a regional office in Nairobi.

CFC – Stanbic merger on track.

Dar es Salaam community bank extending their rights issue offer by one month to June 30.

A bank site was hacked (this one?)

Family Bank is being sued for making a bribery allegation against a Central bank official

First Community Bank to be Kenya’s first Islamic Bank

An blog investor perspective on the Housing Finance rights issue

KCB plans to open 2 0 branches in Sudan. Also there brief panic created by a smoky generator this week atop Kencom House.

CFA’s wanted: Investment banking gets even more lucrative now in Kenya

Forget the tip jar

This past week I discovered two jobs where one is forced to receive extra money just for doing their job (and it’s not a bribe)

First is for workers at the harbour/ports. Even honest people walk away with (a minimum) Kshs. 2,000 at the end of the day in lunch money from grateful transporters just for doing their job. These guys (transporters) pay so many bribes that when someone does their job without asking for a bribe, they still can’t get over that and press some cash into the reluctant hands of the officers.

Then, passing through the airport yesterday, I overhead several travelers, too bothered to reprice the cost of a cup of coffee in Kenya shillings, pay 1 or 2 dollars or pounds and dash off to their gate. How that money is shared is another matter – but when an 80 shillings soda is paid for with a £1 note (equivalent) to about 130 shillings, there’s a healthy cut for someone – and probably more than any tip jar would bring in. This is probably a common occurrence in in the tourism industry (see how tour van drivers usually have plenty of dollars to sell)

KPLC unbundled

A new company will be spun off from the Kenya Power and Lighting Company once PricewaterhouseCoopers complete a review and formulate a balance sheet for the new transmission company.

RVR shutdown: Kenya Ports Authority has ended a contract with Rift Valley Railways for non-performance. What ails the company that has invested so much in new trains? Well the actual railway is still run by Kenya railways who have not seen any significant investment in years (but who have just advertised for a new MD)

Other Madaraka Jobs
most from the papers

Aureos Kenya a private equity fund is seeking investment professionals. Apply by 20/6 the managing partner at 43233-00100 Nairobi.

British Airways: Trade sales manager East Africa, Corporate sales manager East Africa. Apply to hcapjobs@wananchi.com by 8/6

Investment Research Consultants at Kaimana Consulting to evaluate investment opportunities in the emerging markets of Eastern Africa. Apply to jobs@kaimanaconsulting.com.

Uchumi Anniversary

One year ago today, Uchumi closed down. The management resigned, and the government later stepped in with a rescue package, receiver manager, and arrangements with the companies’ banks.

AGM season; Yesterday Uchumi held a meeting for shareholders. Watching KTN, it appears the media were kept out (as had been at past shareholder meetings). I was not able to attend (as a shareholder) and I am requesting any reader who attended to comment with a synopsis or key issues mentioned at the Uchumi meeting or any other AGM at KICC yesterday. Anonymous comments are given less weight, so do sign your comment with a name/profile please. (Media reports here and here)

This is AGM season and there are too many events to cover. I have tried to avoid going back to the same companies, but when you have two or three on a given day, in addition to other duties – yesterday company AGM’s included Nation Media Group, Standard chartered and Uchumi, one can’t be everywhere.

Uchumi Receivership: Media reports indicate that Uchumi (under receivership) may have improved performance by 50% over their best recent year. The audited results have not been released do they public, nor do they when a company is under receivership.

A receiver / manager (RM) (or bank hangman) is appointed by debenture holders (usually bank or financial institution) when they see a company is going to crash. His/her job is to salvage what they can for the banks to recover their money (usually by sale of assets), not other shareholders or suppliers. By that measure, the Uchumi team (led My Mr. Ciano) has gone an extra mile in engaging & informing suppliers and shareholders in the recovery plan. Shareholders because Uchumi needs their goods on the shelves and shareholders to raise money.

RM’s usually are unable to revive companies. This is because, by the time they are appointed, the company is beyond salvation. The owners/management will have run it down, hidden information from banks on the poor performance of the company, withheld payments to banks, staff and unfortunately to the tax man and city council, among other fatal decisions.

Some RM’s have gotten very rich in this country, selling the assets of the company to themselves – at throwaway prices, employing their relatives, and enjoying the power to manager giant companies that they would not have risen to manage even if they had worked for 50 years. For others it has become a permanent way of life, as the company (under their management) remains profitable and they see it as a long-term job – see the Nairobi Grand Regency Hotel – that has been run by different RM’s for over 10 years now). RM’s also have to contend with lengthy court battles with the previous owners who also meddle in the company’s affairs through proxies.

But occasionally, and if appointed early enough, an RM can actually save a company. He/she can make some harsh decisions to trim fat e.g. shut down an unprofitable unit that was consuming too much money, terminate bad contracts, and fire excess/expensive employees. They are able to make decisions that a sentimental management were unable to. It has happened before (rarely) and sometimes the now grateful previous owners will acknowledge the work of the RM to turn around the company and will now come back and pay the bank and takeover their now lean & profitable company.