Kenya Airways 2006 AGM

The new Chairman Evanson Mwaniki is a complete professional, who’s rather laid back compared to his predecessor, Omolo Okero, who used to get rather testy at times as meetings were stretched with inane questions.

Like last year (2005 KQ AGM), the AGM was again held at the Bomas of Kenya conference hall, which is quite spacious and has three halls with video screens to accommodate excess crowds of shareholders.

getting boring
Attending a KQ AGM two years ago was one of the events that inspired the beginning of bankelele, but after attending a few of these, it gets monotonous and repetitive. Shareholders ask the same questions year after year, grumble about the same things, make crazy demands of management and generally turn the events into a public circus. Nothing new today, at the 30th AGM of the company and 10th year of its partnership with KLM, but here goes;

Stay low-tech
A brief slideshow of KQ’s impressive performance was let-down by a technical hitch that prevented charts from being shown on-screen for a few minutes of the Chairman’s opening remarks. The same thing happened to Michael Joseph at the beginning of his Safaricom talk last weekend and he was able to perform even better, IMHO, than he would have with a power point show.

Director election
No drama today unlike in years past when several candidates would apply. After last year, many must have realised that it is pointless to apply unless you have either the KLM (26% owner) of the Government of Kenya (23%) backing you. This year the PS Ministry of Transport and Micah Cheserem were up for re-election with only perennial candidate Japheth Rob applying to join the board – and the results should be a foregone conclusion.

Shareholder Queries

Airbus shutout
Japheth Rob made a for Airbus aircraft to be included in the Kenya Airways fleet again arguing that Airbus aircraft the airline had till a few years ago were superior workhorses that had delivered good returns. But MD, Titus Naikuni, replied that extensive fleet evaluation had led the airline to go with Boeing aircraft in recent years and alluded that bringing back Airbus would mean increased costs in pilot (& personnel) training and maintenance capacity for an Airbus fleet.

KLM shareholding
Government is comfortable with it now. The split should not be seen as 26% KLM and 23% government, but rather 26% KLM and 74% Kenyan shareholders and that this model should be emulated by other parastatals in future.

Questions asked today, as they are every year included;

  • Can we have more dividend? (asked three times today by three different shareholders!)
  • Can we fly in a plane /can you give shareholders discounted tickets? (also asked three times)
  • Conduct AGM in Swahili?
  • Can we have more women directors. Chairman replied that no women applied this year. He also said that many companies are looking to add women directors to their boards but that many of the qualified ones have executive positions and are not willing/able to find time to attend to additional board matters.
  • One said the packed lunch was not adequate (today’s handout to shareholders included tote bag, t-shirt, and a lunch box (with soda, two water bottles, chicken, beef sandwich, bun, yoghurt, an apple & orange, fruit juice, cake and chewing gum!)
  • Can you allow shareholders to bring kids to the AGM
  • Can you pay for our transport home?

Other News

Scangroup next
One of the VIP guests at the AGM today was Bharat Thakrar, the Scangroup CEO to see what kind of AGM he’ll have to hold for his 90,000 shareholders in a few months.

CMA shareholders initiatives

  • cross listing by Kenya Airways on the Uganda and Tanzania Stock exchanges has brought only 38 individual and 5 institutional investors from these countries.
  • CDS: Of the current 78,000 KQ shareholders, only 12,000 have immobilized their shares in their CDS accounts.

Investor Awards
The 2006 Africa investor awards will be held at the Safari Park Hotel on November 9th and Kenyan companies are encouraged to enter here for any of sixteen categories. Entries close September 15th.</a

Jay Z disses Kenya
His blue print for Africa or concert tour schedule includes Tanzania, Nigeria, Angola and South Africa – but no Kenya!

25 thoughts on “Kenya Airways 2006 AGM

  1. coldtusker

    The important stuff:
    – Wacha Jay Z… when is Beyonce visiting Kenya???
    – Ironically, if he uses commercial transport then he might have to fly KQ from Barcelona thru Nbi to Dar!
    – Other options are Emirates & SAA

    The other stuff:
    – Mega thanx to banx for the informative & entertaining report. Hmmm… same stuff, different year???
    – So what were the mgmt answers to the same questions (asked thrice!!!)
    – Asked thrice… kwani they think KQ board is Peter… Well just like the P-man denied JC 3x, I figure so did KQ!
    – Is cross-listing worth it unless done for PR i.e. we are not outsiders y’all…?
    – Does anyone ever ask questions on the Annual Report & Financial Statements?

  2. Anonymous

    This is an amazing blog. You simplify business/financial stuff so much that it is palatable and interesting to those who are not financially savvy. Keep up the good work.

  3. kenyanentrepreneur

    Those investor conferences never yield any good information.

    Enron, Tyco and all those other fraudulent companies held these “conferences” and their shareholders still got screwed.

    I’m more upset they gave them sandwiches! who in kenya eats sandwiches…they should be ashamed of themselves.

  4. Alibaba$tocks

    Banks; good effort here.

    No earth shaking issues here, i see lack of understanding of corporate issues and a pinch of hand-outs alike in political arena that is awash in kenyans minds- abit understandable. A challenge to local companies as a social responsibility to educate their investors on intricacies of corporate governance.

    Cross Listing is a huge advantage to Kenyan investors to penetrate neighbouring marts for faster acceptance and avoid trade barriers by being branded foreigners especially in TZ.

    Contempt to invetors is self-defeating as likely to burst on the face of alot of companies if not taken positively. These are the owners of capital and deserve an equal share of recognition. How else would they satisfy their demands if not through dividends? This can be traced on short term gains and desire to reap the earnings reported in billions.

    Keep off the mart if not ready for bizzare questions.
    An elitist attitude & quest bound to fail.

  5. sassy

    as usual kudos for a good report- saw the agm on the business news and just prayed- hope Banks is attending and couldnt wait for your post!
    I have to echo coldtusker- why is it always that shareholders dont raise queries in the annual reports and financials?…. just curious

  6. The Speculator


    Am a new blogger following your interesting comments. I wonder what they had to say about the future of KQ considering the dreamliners they are expecting in by 2010? I would imagine they may require additional funding from the equity markets. Ideas?

  7. gathinga

    good brief here! by the way does anyone know the lenght ofT. Naikuni’s tenure? This would be an important aspect in judging the future of KQ.

    Did anyone ask about the plan to hire ‘foreign’ pilots. this generated quite of bit of heat with the unions earlier in the year….industrial action againt KQ would be catastrophic.

    With respect to domestic and regional routes (entebbe), there are new entrants who have launched some price war. this thretens KQ earnings in the short term, as they may have to slice prices below economical levels to kill off these offstarts as they have done so nicely before. Otherwise, these small outfits can only survive on charter services and non commemrcial routes like juba.

    banks what’s your take on the compe b2n small outfits and KQ for domestic routes.

  8. bankelele

    Coldtusker: am not a believer in Beyonce, would rather pay for a Jay-Z concert. let’s look out for him at JKIA. answers were, on dividend was that they have to retain earnings for unexpected events, and that giving free/discounted tickets to 80,000 shareholders will put a big dent in profits & dividends

    kenyanentrepreneur: I disagree,and say some good info can be gleaned from AGM’s.

    Alibaba$tocks: I just fear for Scangroup who will have a similar number of shareholders but who have little idea about the advertising industry or how Scangroup makes its’ money!

    sassy: thanks. some good questions are sometimes asked from the accounts, but mostly it’s why are costs going up

    The Speculator: thanks, Dreamliners will probably be financed by banks, either EXIM-USA or Barclays like their 777’s

    Gathinga: I though about that, but no idea. I thought he would jump KQ and go to revive the now-privatised Kenya Railways, but no ones knows. KQ is too strong for the small UG airlines who will only be bit players who feed into KQ/KLM network. They will have to partner with Emirates or BA to compete

  9. coldtusker

    No elitism but RELEVANCE. There are 3 hours to listen to & ask RELEVANT questions.

    AGMs have & need certain “rules” to follow. An AGM is a BUSINESS meeting not a kamukunji. Moreover same inane questions every year.

    “Any Other Business” should be presented to the Board 14-21 days PRIOR to the AGM. The Board has to address it.

    Kenyans have a nasty habit of discussing inane/irrelevant topics at various fora e.g. politics at funerals! Consolations, eulogies, bury him/her & then hamaa… Have some dignity!

    I like doing biz with Americans coz most are (generally) friendly, punctual & a no-BS attitude by getting to the point!

  10. aJamaa

    LoL at some of the questions. Especially the one on allowing shareholders bring their kids to the AGM. Looks like some people would like to turn the AGM into a day out for the family. And does this imply that they do not let kids into the AGM? What if an under 18 is a shareholder?

    Why do they provide lunch? It would make more sense to pay a higher dividend, re-invest the cash or donate the cash to a charity. This would also help keep the AGM breif.

  11. Ig-know-rant

    We are an economy in transition, hence the rationale to give lunches and the goodies to shareholders during AGMs; most even do not realize that it’s a serious business meeting and thus the odd questions about bringing kids and freebies. I once went for a KTDA tea factory AGM in shags as my grandmother’s proxy. The shareholders there view these meetings as annual (and may be christmas) parties!!!

    I ‘heard’ that Naikuni’s tenure is up to 2010 (and may be beyond) and the chap was set for/set for himself some serious targets and his perks tied to these.

  12. bankelele

    coldtusker: The business part of an AGM take a half hour at most unless there are extra-ordinary items. It’s rare to have proxy matters, petitions (e.g. environmental) added to the agenda by outside parties, but this may start in a few months.

    aJamaa: Person wanted their kid to ‘learn’ about KQ, but of course they wanted more freebies. If shareholder is under 18, they should be admitted if they can prove ownership. Lunch, freebies are provided to appease/pacify the crowd – the cost si much lower than payingmore dividend. e.e. KQ will pay out 800m in dividend this year, while am sure AGM did not cost more than 5m

    Ig-know-rant; I think many people equate AGM’s to co-operative society meetings with food and where even the budget is debated and memeber can declare their candidature for the board from the floor. As for Naikuni and Canty, they earned 67m combined (as exec directors) so I don’t see him walking away before his time is up

  13. Anonymous

    The real issue with those AGM meetings is not what is said, but rather, do these companies have INDEPENDENT boards that will look out for the interests of the shareholders?

    if the boards are not INDEPENDENT, then those AGM meetings are meaningless. This is why I referred to Enron. The board was totally in the pocket of the ceo. the ceo lied to the shareholders at several meetings!! & many people ended up losing millions of dollars.

    about the lunch – a fully, catered lunch should have been provided. Remember, the shareholders are the OWNERS of the company. How much would it cost to have a lunch catered?

  14. coldtusker

    KE – Oh, puhleeze… One of the USA’s most shareholder-friendly listed firms (with an awesome long-term ROIC) has shareholders pay for their own lunch during the AGM! Yep, no boxed lunches either!

    I am sure you can figure out which Firm I am referring to…

    Check out Banks’ earlier blog entry on Barclays Bank’s 2005 AGM (held in 2006) where inane questions on food, freebies & transport came up! I have to say, Adan Mohammed tackled the questions rather well…

    I repeat, AGMs are BUSINESS MEETINGS not family gatherings even if the CEO’s or Chairman’s PR machine calls you “family”!

    Regarding independence of the Board… The less independent the Board Members the MORE important it is to attend the AGM to vote in better candidates!

    I recall KQ’s 2003 AGM when the govt tried to get “its” slate elected but were decisively rebuffed by KLM with the support of other shareholders.

    – Have you ever attended an AGM?
    – Have you ever read/looked at the Notice/Agenda for an AGM fo a listed Kenyan firm?

    Note that the WEALTHIEST Americans are folks who have held onto their shares (whether they founded the firm or not) & not speculators who followed trend investing!

  15. Anonymous


    why do you assume that trend investing is all about speculation?

    & have you ever heard of john henry, one of america’s WEALTHIEST men, who also happens to be a trend investor???
    & I don’t know where you get the info on what the “wealthiest americans” are doing with their investments?

    I wouldn’t waste my time attending an AGM meeting. but if it works for you, go ahead and attend them.

  16. bankelele

    As expected, director election rsults, both KLM and the Govt voted for Micash Cheserem and PS Gerrishon Ikiara, both tallying 237 million votes while against Japheth Rob who had 236m against him.

    KE: Many companies on the stock exchange have strong shareholder percentages, many have 70% and they realise this which is why they tend to have majority of independent directors (but sponsored by the shareholder of course)

    As for lunch, catered lunchs are often messy with chaotic stampedes and grabs for food (I have seen this at many AGM’s including KQ’s (at the carnivore in 2004) – since then they have had packed lunches which are much easier to distribute in an orderly fashion
    it a meetings.

    Otherwise, I enjoy AGM’s, truly I do.

    coldtusker: I agree that even when a majority vote is not in question, the board takes notes of strong shareholder objections (see Uchumi shareholders complaints about auditors at the last AGM in 2005). Also , in a close election, independent KQ shareholder votes swung the directorship to Micah Cheserem and not Joe Wanjui who had the government’s nod in 2003

  17. Anonymous


    I have no idea what you are talking when you say many companies have “strong shareholder percentages”?
    It doesn’t make sense.

    One person could own 70% of the shares & they would be have some power in terms of deciding who sits on the board. On the other hand, 3,000 people may own very small parts of that 70%, & their voting power will be greatly diminished.

    I’ll offer a broader explanation later on.


  18. coldtusker

    KE – My list of wealthiest Americans is from Forbes.

    Compare their shareholdings from year to year on the shareholders lists. There are multiple resources. Research is key here. I stuck to the top 10.

    Most of them have held huge stakes in these firms for years. Only exception was Paul Allen who has invested significant sums in new ventures/start-ups for many years.

    Who & where is your John Henry in the top 100 on the list?

    BTW, I called the 15/- for ScanGroup!!!

  19. Anonymous


    unless you personally know the financial advisors of the wealthiest people, i don’t know how you could track their personal investment history over the course of several years! that’s not research, it’s guesswork on your part.

    Also, if you look at the top 10 list again, i’m sure you will notice that with the exception of warren buffet, all the others have made their money by being entrepreneurs and by creating companies, NOT by investing!

    Now of course, if you have over one billion dollars already made, your not going to stick it all in a bank. It has to go somewhere. So, I wouldn’t be surprised if some of their money is in big blue chip company stocks like GE or P&G. But that’s not the point here. The point is, if you DON’T have money, don’t think you will make it by guessing about stock prices on the NSE.

    on Scangroup:
    Ksh15?..c’mon – I converted it into US dollars and it’s like 60 cents. It’s a penny stock! (anything at trading at less than $5 dollars is considered a penny stock in the U.S. …it’s junk. Why even bother?

  20. Anonymous

    @ anonymous: penny stocks indeed but i think you get it wrong you should look at it in using parity $1 usd in uS is not the same as $1 usd in kenya. – i mena the turnover of an average uchumi
    in kenya is almost equivalent to the turnover of an average 7/11 or even a macdonalds. would that stop u investing ?

  21. coldtusker

    Scangroup. What currency & exchange rate are you using? I can’t figure it out!

    US$ on Aug 29 2006 was approx KShs 73 per 1 US$… so 15/- would be approx 21 cents!

    You are thinking in US (or UK, German, Japanese terms)! Kenya is NOT the USA. We know we are NOT the USA. We are far from being the USA!

    ScanGroup went public (IPO) at 10.45. By Kenyan standards 10.45 is not considered a penny stock! Kenya’s Per Capita Income is $300!

    Kenya’s most “expensive” stock based solely on price is EA Cables at 600/- = $8.50

    So if you take $5 as your minimum price then ALL (except EAC) NSE share prices are GASP!!! penny stocks!

    Woii…woii… woii!

  22. coldtusker

    KE – On the “wealth”…

    Puhleeze… At least I gave my sources! Where is your “source” on J.Henry’s wealth? I a’int saying JH a’int got the chums… but where’s the proof?

    I did not see his name in the top 100… Is he American? If yes, then he might not be in the top 200 worldwide!

    If you feel forbes doesn’t cut it well check

    Seriously… do you even read or understand before you type?

    The (current) Waltons INHERITED their cash, they are NOT entrepreneurs! Sam kicked the bucket a while ago!

    I did not say that the folks traded or invested into their wealth! They do not treat their shares as “commodities” but as investments!

    Actually, Buffett is NOT a trader!

    Hah… Ur kidding, right? Ellison sticking his chumas in GE? Paul Allen in P&G? What next, Bill Gates in IBM?

    BTW, I still like your articles & comments! At least you get me thinking a lil more than usual!

  23. kenyanentrepreneur


    John W. Henry’s networth fortune has dropped some, but he is still worth about 800 million dollars and that would still make him one of the wealthiest americans today.

    your point about sam walton’s children is just silly. Had sam walton, the entrepreneur, not founded wal-mart, his children would have had nothing to inherit. so, the SOURCE of the initial wealth was created by an entrepreneur.

    Your point that people don’t treat their shares as “commodities” but as investments is also silly. as i’m sure you know, commodities (oil, gold,) are traded on the chicago and ny mercantile exchange. also, as i’m sure you know, individuals can buy shares in commodities and they absolutely can become part of your overrall investment portfolio.

    to make any significant amount of money on the nse, you’d really have to be able to borrow a large amount of money from a bank or you’d have to begin with a significant amount of money. So, yes…scangroup @21cents could go up to $2 dollars and you’d make some money, but unless you started with a good chunk, why would you even bother? staying in the world of hypotheticals, the price could also jump to $200 dollars a share, but like you said, kenya is a poor country…if the price got that high, very few people would be able to afford it. So, the chances of that happening are almost nil.

    america’s economic dominance comes from entrepreneurs who’ve used their creativity and imagination to create great companies. this is how real wealth is created. I think people are getting too exuberant about these IPO’s – that’s not where the wealth will come from.

    have a lovely day, bro

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