There’s a fascinating banking book called Blood Money about how Swiss banks collaborated with the German army to rob Jewish citizens during World War II – and after the war they made it very difficult for survivors to claim money or assets in their vaults, denying it was there it was in their custody or by asking survivors to provide documentary evidence that their (deceased) relatives were even customers of those banks etc.
I’ve had a few unpleasant encounters with custody registrar services Custody Registrar Services (CRS) of late that need to be vented out. (Note they haven’t harmed anyone as far as I know )
CRS are registrars they handled registry matters for several Nairobi Stock Exchange companies like blue chip Bamburi, BAT, East African Breweries (EABL), Kenya Airways (KQ) Nation Media Group (NMG), Barclays (BBK) and others like Centum, Express, EA Cables, Crown, Sameer Africa, Olympia, Rea Vipingo, Kakuzi etc.
CRS has a tortured history. It was formerly a unit of Barclays bank, known as Barclays Registrars (BARS), but BARS got embroiled in what was a massive insider fraud case (chronicled here) a few years before stockbrokers become the no. 1 villain. Barclays then sold the unit to former employees and new shareholders (called CAPSEC). They remained in Barclays Building before moving to their current offices at Bruce House Nairobi, which still has a Barclays-like feel.
My beef with CRS is this; they now are the ultimate custodians of shares, who put shareholders of KQ, BBK, and NMG etc through hoops to get anything done at their sixth-floor office. CRS are supposed to do the following for their corporate clients (registration of share transfers, processing & distribution of dividend payments, share register maintenance, unclaimed dividends processing) but in doing so:
• They ask for documentation that is none of their business – and which is not required by the Capital Markets Authority (CMA), Nairobi stock exchange (NSE) or central depository & Settlement Corporation (CDSC).
• They are not the frontline of customer service but act like they are, and yet no shareholder chooses to do business with CRS. People buy shares from stockbrokers or banks and provide their documents at that point where they are comfortable providing any information that the bank or broker requests, but not to CRS with whom they have no affiliation with
• They are lazy – and ask for every document to be notarized (i.e. rubber-stamped) by a lawyer on their panel. In other words, they assume you’re guilty first and need to be proven innocent. Truth is any bank or government office will do business with you if you show a national ID and give them a photocopy – not CRS, they send you to the lawyers.
• They are inconsistent, and any attempt to deal with them will usually require several visits back and forth in search of the extra documentation they can arbitrarily request.
• They are so risk averse in modern times. E.g. Safaricom with their registrars were able to register over 180,000 Safaricom shareholders to receive their dividends by mobile phone or m-pesa dividends – they did the registration at supermarkets and bus stations. I’m sure KQ would like to be able to do the same for their 72,000 shareholders, but if they used CRS, shareholders would probably be asked for a blood test or fingerprints first!
The conventional wisdom for dealing with them is that you have to go and argue your case because it’s like being at the US Embassy and asking for a Visa – Simple for some, but not easy if you’re a student or resident living overseas (Diaspora) or a grandmother living far from Nairobi (a typical rural based, retail shareholder)
So what will it take for CRS to shape up?
– More complaints to the over-burdened CMA or NSE help-desks?
– Appeals to the respective company secretary’s
– A shareholders petition to EABL, KQ, NMG, BBK and others about the need for a more responsive and customer-friendly registrar?
Wow, never knew they existed. I’ve all along been under the impression that what they do is what the CDSC is supposed to be doing for all NSE shareholders
banks I totally agree with you about CRS. I live in Mombasa, trying to immobilise shares e.g. BBK, SCBK, EABL, is sheer torture.
After lot of documentation that is asked for, finally you are asked to verify your signature in person at their offices in Nairobi.
Meanwhile keep up the good work, its easy for us to forget to appreaciate some of your stuff e.g. covering IT meeting, the banking sector report. The banking sector report I specially look forward to. God bless.
Interesting post. I’m going to go get that book tonight. Sounds like an interesting read.
Thanks!
Its really frustrating dealing with them and i have had several issues with them in the past
But one can understand and feel for them with fraudsters being on the loose. Having been messed up during the Safaricom IPO, i understand why people like CRS, Dyer & Blair and CFC Stanbic and so on are so paranoid and strict…..people like CMA/NSE must actually help them
I am all for strictness but not stupidity. CSR have no standard mode of operations. I have been to their office couple of times for share demobilization and i had to confirm my signature like ten times.
Really is it CRS you should be having the beef or the ultimate cause of the issue which is KQ, NMG et al? Iget my dividend cheque from Equity either to my bank or post with no issues…
I was one of the first 50 people to use the NSE/CDSC’s online complaints site and, yes, the complaint was about CRS. The crooks had switched me from receiving dividend payments by cheque to bank debits without my authorisation! And then they ‘sent’ the money to a fake/non-existent bank account. A new cheque surfaced a week later, without apology. (On the day I went to get it, there was a couple in their 50s bitterly complaining about the notarised documents. I practically pushed them all the way to Nation Centre.) I sleep with one eye open when it comes to dividends paid through those guys.
PKW: if you own shares in any of those companies, you’ll have to deal with CRS one day
Anon: signature verification is not enough for CRS
Loan Shack: good book, but hard to find
Anon2: why is the safaricom IPO blamed for everything these days? the behaviour of retail was known before, and they are not the fraudsters!
Paulo: exactly my point, they ask for something new and you have to come back several times
MainaT: beef is with CRS, dividends come through, but try and immobilise a share or change your address (you in UK?) and you’ll see
propaganda: well they haven’t changed it seems. I must say they have a good record keeping /tracking system, but why they put shareholders through so many hoops when they know the answers is a mystery
Well I’ve had beef too with CRS & one broker who are also hands off on the notaries and all that. Working on behalf of some really busy clients, I have had to get a serious tongue-lashing from them. When you take a whole day running around because someone doesn’t trust the VERY CLIENT who’s before their eyes. Up to now the immobilisation process has been stuck & my client’s yet to receive his KQ dividends in the last 3 years. Or has this anything to do with expected return or Uchumi (which I think they were handling)???
Bankele-yes i just changed details of my CDS account because they showed my old address and also my name in short rather than full.
All done the same day