Scangroup AGM

Excerpts from the 2008 Scangroup AGM, Q & A session held today at KICC.

top issues were dividend cheques and bonus shares

Misplaced shareholder cheques: The question was posed by Mr. Shah, who’s probably the second most famous public shareholder after Mr. A W Chami and who had waited for nine months for a dividend cheque error to be corrected, and was faced with bank charges of several hundred shillings for his efforts.

In response, the company said they were working to sort out shareholder cheque and unclaimed dividends issues: 

  • Said the figure was now down to 3.2 million shillings. (which if unclaimed after a few years, will go to CMA)
  • Passed some blame on to stockbrokers who have not reconciled some accounts since the IPO
  • On cheques, they have an arrangement with their bankers (CFC), so customers could cash their cheques for free can (at the CFC upper hill branch)
  • Said electronic (EFT) payments had not been successful because a lot of information provided by shareholders was wrong.

Bonus shares: Several shareholders argued for bonus shares. Chairman replied times that – it was not the right time, they will cross that bridge when they get there, when they need to they will adjust their capital, will look at fund-raising at that time (shares were not the only avenue available)

CSR: Company is weak; Chairman replied they are doing more this year including some work with IDP’s.

A marketing company that does not market! Can the company do some advertising so it becomes well known?; CEO replied that they pitch to corporates and there’s not a marketing person in East Africa who is not aware of the company or its affiliates.

ESOP: It was good to have discussions at this AGM on the company’s employee share ownership plans (ESOP) – as CEO Bharat Thakrar explained that the board had approved for 6 million shares a per year to be availed through the ESOP to key revenue drivers and to ensure that senior managers were very well incentivized. All managers get targets, which entitles them to some options at the end of the year. The Chairman added that the shares were not free, were paid for by managers to the company and were priced on the date of acceptance i.e. market price. The report 2007 report noted that was ESOP set up under a trust deed in February 2008 but that no options have been granted so far, though shareholders have approved 15 million shares.

African ambition: Different shareholders challenged the board their ambition to be the biggest media buyer in Africa by 2010 when they (i) didn’t have the capital (ii) had dormant offices in Malawi, Mozambique, Zambia and Nigeria. The first shareholder was actually asking the company to give bonus shares/increase float (from the current 160 million shares to at least 250 million) while the CEO answered to the second – that all the offices were active, (except Nigeria) and were used for billing companies in those countries.

Cross-listing: One shareholder asked them to cross-list as their market was also Uganda and Tanzania. Chairman said it would make sense at the right time, but it was also very expensive to do.

Super sleuth: One eagle-eyed shareholder pointed out, and the company confirmed the error; that the top ten shareholders (printed in the annual report) had 66, not 50% of the company shares.

Goodies: Lunch offered, at KICC grounds, but no details.

8 thoughts on “Scangroup AGM

  1. adam cartwright

    yenyewe u r not uaself this week. so how could u forget the goody bag? am there was none? no bananas, brollys,t- shirts etc… sounds like it was a boring one.. word on the ground is that scangroups has an extremely high trun over for lower and mid tier level workers, ati they either work them half to death ama there is something going on under the radar there…. i know about 12 ama thereabouts people who were either fired ama quit in the last four months….

  2. pesa tu

    What’s the kenyan obsession with bonuses and splits? they don’t make sense for all companies.They are for companies that are mature and have stable cashflows.

  3. Anonymous

    In other news…

    Former KCB employee invests 91.5 Million with dyer and blair…

    Now sues D&B for not getting sufficient returns on investment..

    Seems like this is someone who knows very little investing and managing/growing wealth portfolios. I mean if you had 91.5 a million investment, you would at least monitor it’s performance, read your statements – right?

    Hence the question is:


    What kind of salaries are paid by that bank?

    I smell a stinking fish somewhere near KCB…

    1. KRA – investigate source of funds

    2. Banking Fraud Investigations to confirm employee did not fleece KCB

    3. CBK / Anti money-laundering to check if drug/crime money is involved.

    4. Anti corruption to check for political connections.

    These people should be on this guy with a Microscope.

    Like Buffet says, if you see one Cockroach in the open – be sure there are many more hidden out of sight!

  4. bankelele

    adam cartwright: no report on goody bags ( i dont think there were any), an no details about lunch (box/buffet etc)

    Pesa tu: multiples share holding for free. one shareholder argues that the shares wer bought at 10:45 and now that they have tripled, they are ‘expensive’ hence they shoudl be split to make tehm afforadble again

    rags: thanks

    Anonymous: I thought Mr. Kiarie was the head of Deloitte. If I had 90 million, I’d be dealing in real estate, not shares

    Anon: great, but I’m still on Safcom. Most of my calls are safcom and I use M-Pesa and GPRS too much to switch just to talk cheaper

  5. warogi

    Mr kiarie was KCB director of risk management and was at one time being hounded for fraud. I wonder what happened to the case. All the same, Dyer and Blair are thieves and take advantage of clients ignorance.
    This man should not complain too much since his wealth was hidden from detectives.

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