Kenya- Re shares.

[Daktari wa makazi]

www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=3&newsid=95835


www.eastandard.net/hm_news/news.php?articleid=1143967265


Next month the Kenya- Re will offer 40% of its shares to the public from which it is estimated to earn 4 Billion. An investigation report in the press today reveals that 35 Million has been stolen in the past four months from the Compnay. How do I know that? Well Kenya-Re was being re-organised. The Report was commissioned in January 2007 after a whistleblower at Dyler & Blair Investment Bank who are managing the share sale alerting the Capital Market Authority about the theft. The entire findings of the report are yet to be made public. As a result the company’s managing director Johnstone Githaka and financial controller John Kinyua were suspended latter to be sacked for allegedly theft of the 35 Million to buy company houses which were to be disposed. No outside recruitment was done to fill in the vacant positions. The Board relied on deputies who now fill the positions. A new Managing Director, Ms Eunice Mbogo, and Finance Director, Mr Nyakundi Mogere have now been appointed. These are two individuals who have been promoted, it seems because they are non-Kikuyus as there in nothing exceptional about them. I think the whole exercise of the report was to cleanse Kenya-Re so that the public could be sold its shares thinking it was a clean company. If indeed the company is clean why not release the whole report so the public could make an informed choice when buying the shares. I fear the public are hookwinked into buying these shares based on euphoria and hype we have seen generated amongst the public only to have their money stolen later. Should the public buy any shares from such a company? I wonder…

[job]

Sadik,

This is another front where the public is being fleeced in two ways,...first by disposition of public assets at undervalued figures, and second by collecting share funds from the same public towards stocks with unknown future and whose real value may be cooked up. To the stock investors, some easy red flags and warnings about a company slated for sale include obvious conflict of interest scenarios such as those thriving in Kenya-RE.

Going by trends with major stock brokers and the toothless CMA which seems to have no regulatory power over insider traders and stock god-fathers, I may postulate that only venturists like TransCentury & other big time cash launderers are real beneficiaries of stock purchases in blocks. The public may be in for a rude shock when the chips falls in place. It may be too late.

If Ethical conduct in corporate governance was held serious in Kenya, then CMA should not allow Kenya-RE to be listed in NSE due to the ongoing corruption cases which have bedeviled the Co leading to the firing of two management executives.

Claims that 32% of Kenya Re's real estate property have been grabbed including use of company funds to pay off mortgages for executives (which KIMUNYA himself has admitted to) are both SERIOUS and this sale should not be rushed with the AIM of raising funds for Kibaki's re-election.

There's simply lack of transparency, timid regulation from CMA and I must add, lack of activism by the public. These fellas are cashing in on the ignorance, euphoria and hype of the uninformed public, too eager and excited to "own" a piece of Corporate Kenya. Wacha tu.

A recent UN report revealed that many of these firms being disposed don't adhere to international financial rules and regulations (hence blocking transparency and accountability)
www.timesnews.co.ke/08mar07/business/buns3.html

Githongo's own insight, has told us in Kiraitu's words & admission,....that the Kenyan taxpayer, was to be robbed in excess of Shs 5 Billion,....to fund Kibaki's 2007 elections. That's from the horse's own mouth.

Besides shares floated to the public, people need to be concerned about Kibaki cronies acquiring major stakes in these companies for a song. TransCentury Investment Co. owned by a group of MKM businessmen and well-known allies of Kibaki — has in the past three years been on an acquisition spree, spending multi-millions purchasing shares in one listed company after another. East African Cables, KPLC (the shares formerly owned by NSSF), Development Bank of Kenya, Housing Finance Ltd, Equity Bank, Kenya Railways etc etc. This is a group of politically connected individuals emerging as bargain-acquisition artists of Kenya's public assets.

Job

[kamalet]

Sadik,

I think a correction is in order. Please note that the whistle blower was actually Nyakundi Mogere who has now been promoted as Financial controller.

The amount allegedly stolen by Githaka and Kinyua is slightly more than the 35 million you quote but certainly lower than 50 million.

Kenya Re is still a very strong company with a relatively strong asset base which sufficiently covers its aggregate outstanding losses in the balance sheet. Most of the assets in Kenya re are actually cash assets. For purposes of the flotation, Kenya re has been recommended as a very good buy!

I can assure you that the bigger majority of the investing kenyan public is not as stupid as you are painting them!

Job,

You say assets are being undervalued and then sold to Kenyans. Do you have an example of recently disposed undervalued assets and - they cannot be many as so far it is only Kengen and Mumias that have been sold and Kenya re is the next in line?

I never seem to understand why anyone would have any gripe with people perceived to be friends of Kibaki not trading on the stock exchange like other Kenyans. What the NSE does is provide a level field where Kenyans can compete for investments, and perhaps if you checked a recently circulated list of NSE millionaires in Nairobi, Trans century does not feature in the list of owners of some of the traded companies as is the case with certain other individuals such as Karim Jamal and Paul Ndung'u.

You can decide that because you see kikuyu's flood the NSE it must be laced with evil and hence your advice to Kenyans is to steer clear of the NSE. Not very many people will be listening to you and when they turnover their millions you will be looking for reasons why you are still poor!

[roughrider]

It seems Kenya-Re must be sold at all costs; corruption or no corruption. For some strange reason as many government shares in as many firms as possible must be sold to the 'public' before 2007 is done with - is the idea to raise as much money as possible or to gain as much ownership as possible? Or is it, as i suspect, bowing to pressure from IMF?

And is this trend related to the strong shilling in recent times? Who is bringing in the dollars?

I think frenzied sale of public assets is ill-advised. Very few Kenyans participate in the Nairobi stock market and are therefore majority are disenfranchised when public assets are disposed off in this manner. We should recall that many of the public firms on sale were built with taxpayers' money and debts that we are probably still paying. Disposing such public assets through a poorly developed stock exchange that is only available in Nairobi amplifies and perpetuates inequality.

Take Kenya-Re for instance, the government could raise much more than 4 billion if it waited another year, or two or three and moved Kenya-Re to a new level of profitability as well as allowed it to regain public confidence. Then the shares could be sold to provinces in quotas so that ownership is national and everyone gets a chance to participate.

As for under-valuing, i suppose Trans-century got KPLC shares from NSSF for a song. Similarly, the valuation of Kengen shares was decidedly below the balance sheet valuation of assets. Kenya Railways, with its enormous asset base and potential, was concessioned away almost free...

Finally, the role of the CMA needs to be looked at carefully; even when some stockbrokers pointed out that 'Eveready's books read like an obituary', they still allowed the firm to sell shares to a gullible public, now some people are crying in the toilet. The collapse of Thuo and partners and the emergence of credible evidence of insider trading (recall Uchumi?) as well as illegal trade in customer shares by some brokers have me wondering what the heck CMA is doing??

[kamalet]

RR,

Actually the proposal to sell Kenya Re was contained in last June's Budget where the sales proceeds were included as part of anticipated government revenue. So it really is not a case of MUST SELL as you allude.

Kenya stopped factoring IMF aid way back in 2005 so it cannot be again pressure from the IMF. If you asked me, I think the decision not to implement IMF conditions was one of the key steps this government took towards fiscal independence. IMF was always considered a good rating agency for credit to third world countries, but you will now realise that many countries are going the route of getting rating agencies to determine their credit worthiness.

I find you suggestion of setting quotas amusing. Why do we need affirmative action when it comes to investing? It is a fact that people of Kibera will never compete with those of lavington so if you expanded that, the people of NEP will never compete with RVP. The consequence is that the few rich ones in NEP will be the beneficiaries as opposed to your intended many!

The government is only selling 40% of its 100% stake in Kenya re and this has been based on the premise that this is to plug a financing gap in its budget. If you asked me, some of the organisations the government is still in should be disposed off to the public as this is creates a hope that they would be better managed away from government interference. If they become profitable, then the government benefits through higher tax income as well as new employment being created due to expansion!

Finally you make accusations that Trans century got KPLC shares for a song. Even without defending them, I do recall that NSSF put those shares on the board for three days before they were snapped up by Trans century. With regard to Kengen, you again conveniently forget that they had suggested a book building exercise to determine the appropriate market price for the shares. A certain engineer turned quack economist "blew" the whistle on the exercise alleging that some shares were being reserved for some rich people. In the process the book building exercise failed to take place and a price was determined that was below the market price, as the rise in the price of the stock is evidence that it may have been undervalued. But that was not bad as it led to a very huge number of Kenyans owning a part of a national enterprise. So there might be a positive here if you asked me.

The CMA can introduce as many rules to stop insider trading, but this will be a useless exercise, as there is still a great deal of integrity required that goes beyond simple regulation. How many cases of insider trading have been exposed at the NYSE by the SEC and how many more would have failed thir scrutiny?

[denno]

I don't know if this list made it to jukwaa. It makes for an interesting read. Kamale, you mentioned Paul W. Ndung'u who is this fella?

www.financialpost.co.ke/Pdfs/TOP%20NSE%20MILLIONAIRES%202006.pdf

I wonder if this list is comprehensive....there are some names tha seem to missing MOI, KIBAKi et al

[kamalet]

Denno,

Paul is an accountant who made his money on the NSE by buying shares when the prices were rock bottom. His break came when they (with his former boss Karim Jamal) were buying Mumias shares for 60 cents and later sold them for 25 shillings. Thereafter it was just multiplication of shares. He does not do anything else apart from deal in shares.

[roughrider]

kamalet said:

RR,

Actually the proposal to sell Kenya Re was contained in last June's Budget where the sales proceeds were included as part of anticipated government revenue. So it really is not a case of MUST SELL as you allude.

The role of the CMA is not to accede to questionable placements merely because they are in the budget, even when the books and the circumstances dictate otherwise. The budget is after all, first and foremost, a political tool. This is what sadik is pointing out. Shouldn't investors know all?

Besides its not just Kenya-Re. It is the frenzied disposal of public assets to fund recurrent expenditure.

kamalet said:

Kenya stopped factoring IMF aid way back in 2005 so it cannot be again pressure from the IMF. If you asked me, I think the decision not to implement IMF conditions was one of the key steps this government took towards fiscal independence. IMF was always considered a good rating agency for credit to third world countries, but you will now realise that many countries are going the route of getting rating agencies to determine their credit worthiness.

Not true. The Bretton Woods institutions and those who control them still very much control countries like Kenya. See their latest missive and our so called 'external debt' to refresh your memory and remind yourselves of our grim circumstances.

kamalet said:

I find you suggestion of setting quotas amusing. Why do we need affirmative action when it comes to investing? It is a fact that people of Kibera will never compete with those of lavington so if you expanded that, the people of NEP will never compete with RVP. The consequence is that the few rich ones in NEP will be the beneficiaries as opposed to your intended many!

Again quite untrue. It is not only the filthy rich who can invest. The poor too, given a fair chance and some facilitation can be helped to own pieces of companies. It has been done before. It is the role of a creative government to devise ways of doping this.

kamalet said:

The government is only selling 40% of its 100% stake in Kenya re and this has been based on the premise that this is to plug a financing gap in its budget. If you asked me, some of the organisations the government is still in should be disposed off to the public as this is creates a hope that they would be better managed away from government interference. If they become profitable, then the government benefits through higher tax income as well as new employment being created due to expansion!

Circular arguments that beg the question.... it is not necessarily true that when companies are sold off, they perfom better (see Uchumi et al). In fact before companies are sold by governments, they are usually managed to profitablility & efficiency at which point the arguments for privatization in order to achieve efficiency are less compelling. In kenya, like it happened in Eastern Europe, privatisation may lead to the concentration of wealth in the hands of a few magnates. Absurd to say the least.

kamalet said:

Finally you make accusations that Trans century got KPLC shares for a song. Even without defending them, I do recall that NSSF put those shares on the board for three days before they were snapped up by Trans century. With regard to Kengen, you again conveniently forget that they had suggested a book building exercise to determine the appropriate market price for the shares. A certain engineer turned quack economist "blew" the whistle on the exercise alleging that some shares were being reserved for some rich people. In the process the book building exercise failed to take place and a price was determined that was below the market price, as the rise in the price of the stock is evidence that it may have been undervalued. But that was not bad as it led to a very huge number of Kenyans owning a part of a national enterprise. So there might be a positive here if you asked me.

The CMA can introduce as many rules to stop insider trading, but this will be a useless exercise, as there is still a great deal of integrity required that goes beyond simple regulation. How many cases of insider trading have been exposed at the NYSE by the SEC and how many more would have failed thir scrutiny?

On KPLC - Kamale – you are lying through the teeth.

We all know that when a public corporation is offloading ownership the deal must be public and transparent (the Govt owned 52% at the time and NSSF about 12%). In fact the public is supposed to be invited to buy shares. The deal was done in secrecy. It is nonsense to say the shares were on offer and nobody wanted them. There is a stock exchange in Kenya for heavens sake!

Here is how somebody at the standard exposed this underhand exchange:

www.eastandard.net/archives/cl/hm_news/news.php?articleid=35965


The book building exercise was meant to place those shares in the hands of a few, supposedly ‘prospective buyers’; bookbuilding is only relevant in certain circumstances which were not applicable in this case...

[Daktari wa makazi]

Kamau,

I know it is your habit to be condescending to other when contributing here in Jukwaa, but please refrain from insulting my intelligence. If you are indeed correcting me as you allege please collaborate your correction. Telling me my information is wrong without backing your assertions is simply childish. And pretending you know everything!

Anyone with the simplest knowledge of the NSE will tell you that the IPO of Kenya Re will clearly be a fiasco. But, let us wait for the actual events to unfold before commentating. Secondly, any investor willing to buy shares will be interested in details about Kenya Re. The principal market of the Corporation is the Kenyan insurance market. One would like to know the depth of that market, its catchments areas, and so on. I know it took over the Life Assurance Fund of the defunct Kenya National Assurance Company (KNAC). One would like to know why it bought the fund and how much it paid for it. In 2002, its sale to private entity failed. One would like to know the reason of the failed sale. Kenya Re sold a lot of fixed assets recently. One would like to know the size of the fixed assets the Corporation has now and how many were sold and what was raised through the sale. These are the many facts which must be made available to the general public with detailed explanation to justify people buying the shares. As you can see, Kamau, these are reasonable questions which must be answered.

The truth of the matter is NSE is a shambles. For instance, I understand they are looking to allow Uchumi shares to trade soon as it is argued the Company has recovered enough. I think that is ridiculous. Uchumi was bankrupt by greedy individuals, and that fact that one or two Uchumi outlets are back in business does not mean that its shares will not be a disaster for the buying public. I think Uchumi is not ready for its stocks to be traded until all the monies lost through the premature bankruptcy are recovered and its profitability stably plateaued.

Why are you silent when Francis Thuo, Munge, and now Nyaga Stockbrokers, all Kyuk owned, are openly stealing public funds – money they hold on trust for their clientele?

[kamalet]

sadik said:

Kamau,

I know it is your habit to be condescending to other when contributing here in Jukwaa, but please refrain from insulting my intelligence. If you are indeed correcting me as you allege please collaborate your correction. Telling me my information is wrong without backing your assertions is simply childish. And pretending you know everything!

My apologies if I have been condescending. You are the one that said that Mbogo and Nyakundi had been promoted for not being Kikuyus as there was nothing exceptional about them. If you had asked, me, I would have gone for Evans Jumba to take over as CEO as he has served the corporation for more than 20 years having risen from a management trainee. With regard to Nyakundi, I thought it was important to let you know that he was the actual whistle blower on the scandal.

sadik said:

Anyone with the simplest knowledge of the NSE will tell you that the IPO of Kenya Re will clearly be a fiasco. But, let us wait for the actual events to unfold before commentating. Secondly, any investor willing to buy shares will be interested in details about Kenya Re. The principal market of the Corporation is the Kenyan insurance market. One would like to know the depth of that market, its catchments areas, and so on. I know it took over the Life Assurance Fund of the defunct Kenya National Assurance Company (KNAC). One would like to know why it bought the fund and how much it paid for it. In 2002, its sale to private entity failed. One would like to know the reason of the failed sale. Kenya Re sold a lot of fixed assets recently. One would like to know the size of the fixed assets the Corporation has now and how many were sold and what was raised through the sale. These are the many facts which must be made available to the general public with detailed explanation to justify people buying the shares. As you can see, Kamau, these are reasonable questions which must be answered.

I am sure you are aware of the maxim "Buyer be are", so if you are buying the Kenya Re stock, then you must understand the risk you are taking.

On the issue of Kenya Re's source of business, this is actually split 50/50 between the Kenyan market and the international market. I think you need to look at its global rating of B+ to understand that Kenya Re is not as bad as you are painting it.

With regard to the failed 2002 sale, you surely must recall the efforts of Prof. Anyang' Nyong' in blocking the sale of Kenya Re to Zim Re through Monarch Insurance in Kenya. There was no way you would have sold a company with cash reserves in excess of 1 billion shillings for 720 million shillings as Gideon Moi was pushing for!

Couple of figures for you for 2006. Premium Income - 3 billion shillings, Profit before tax - 719 million, Total Investments 8.9 Billion.

sadik said:

The truth of the matter is NSE is a shambles. For instance, I understand they are looking to allow Uchumi shares to trade soon as it is argued the Company has recovered enough. I think that is ridiculous. Uchumi was bankrupt by greedy individuals, and that fact that one or two Uchumi outlets are back in business does not mean that its shares will not be a disaster for the buying public. I think Uchumi is not ready for its stocks to be traded until all the monies lost through the premature bankruptcy are recovered and its profitability stably plateaued.

Shambles is too strong a word Sadik as the market is still performing well. Uchumi is still suspended from the NSE from trading. But even if they were allowed back, the present shareholders will still need to get buyers of the stock for any activity to happen on the exchange. I still think the buyer be ware maxim will still apply!

sadik said:

Why are you silent when Francis Thuo, Munge, and now Nyaga Stockbrokers, all Kyuk owned, are openly stealing public funds – money they hold on trust for their clientele?

Sadik, I would not like to think that any thief in Kenya steals in the name of his or her tribe.

[aeichener]

sadik said:

Kamau, ...
If you are indeed correcting me as you allege please collaborate your correction.

Pardon me?

A.

[job]

Kamale,

Pay more attention to what Sadik said about your pretence to know everything under the sun. You claim that I will remain poor as you turn-over millions in the NSE. That's the very condenscending attitude Sadik told you about. Quit it brother, and never make stupid assumptions about what you simply don't know. You must learn that Kenyans have many investment options locally and internationally besides trading in NSE stocks which of course is none of your business.

Next, I repeat my statement about Kibaki government's frenzied disposal of Kenyan/public assets at undervalued figures. As Roughrider gave you a prime example, Transcentury
Investment Co. owned by a group of MKM businessmen and well-known allies of Kibaki — has in the past three years been on an acquisition spree, spending multi-millions purchasing shares in one listed company after another.

Transcentury LITERALLY GOT FOR A SONG,.......ALL the KPLC SHARES formerly owned by NSSF. This was done secretly. Contrary to what you allege, just state when the public was invited to buy these shares and how long the offer was made? You know well that 2 million shares representing a 4% stake in the profitable KPLC was simply secretly transferred (within a few weeks) into the hands of Transcentury for a song.

Those shares were in extension formerly owned by the Kenyan public. Now they are in the hands of Kibaki's friends in Transcentury, all from the game of grabbing. Kenyans are not as stupid as you may assume Kamale. They see all the stealing going on in the name of "INVESTMENTS" and "ENTREPRENEURSHIP". It seems whenever questions about irregularities arise under the Kibaki administration, people are meant to be silenced by the terms "Investors"/"investments". We were even told that the Artur brothers were "Investors"

Kenyans can clearly see these groups of politically connected "investors" emerging as bargain-acquisition artists (read grabbers) of Kenya's public assets. You can't spin that!

You are also silent on Kiraitu's own admission that Kibaki's re-election needed to fleece at least sh 5 billion from the taxpayers. This campaign fund-raising has been going on right in front of our eyes. From irregular disposals/acquisitions of public assets, irregular procurements of the Anglo-Leasing variety (> sh 50 billion loss), & massive tax-evasion scams such as those perpetrated by Nakumatt via CharterHouse ( a sh 18 billion loss) and many more. You cannot sugarcoat that!

Lastly, I repeat again that when the chips finally fall in place at the NSE, the cabals of venturists, stockbrokers and insider traders will be the REAL winners,.......CMA is a toothless regulator here,.......many unsuspecting small-time traders acquiring shares in SOME of these companies with opaque corporate-systems will realize they were simply raising funds for some shadowy figures after all. Like Enron, the LOSSES are coming, mark these words. (Note that I didn't say ALL the COMPANIES trading in the NSE will loose out value). I am talking of some stocks being offered to the public in disguise to raise funds for failing corporations. Trends from some of these stockbrokers (Francis Thuo, Munge, Nyaga etc) can indicate these signs to come.

Job

[Daktari wa makazi]

Job

You are absolutely right. Kamau is very quick to try and defend the indefensible. Kenyans have seen a lot of malpractice at the NSE, many leading to loss of their hard earned money to a few mandarins and their cronies. I told Kamau above that Kenya Re was forensically audited by PriceWaterHouseCooper who confirmed the loss of billions in disposing of assets - mainly houses. That report paid for by taxpayers’ funds has not been made public. Why? Because the report point straight at Kibaki's thieving agents who are essentially grabbing public properties.

In my second post, I told Kamau how ridiculous the idea of allowing stocks likes Uchumi to prematurely trade in the NSE but he seemed not very concerned. Indeed, he thinks buyer beware is enough a disclaimer. Kamau must know the government have a cardinal role not to allow conmen and swindlers near the NSE. That is why the Law prohibits insider dealing and other criminal enterprise. But, it is for the government to implement the operation of that Law. It is not good enough to disclaim responsibility cheaply on buyer beware nonsense.

Job, Uchumi was a clear case of grabbing public funds. That is why Kibaki is very keen for its shares to be traded in the NSE without any proper profit or loss warning to the public.

25% of Uchumi is owned by the Industrial and Commercial Development Corporation (ICDC) which is an investment arm of the Government wholly owned by the Government. Both Uchumi and ICDC are listed in the NSE. Uchumi is now under suspension. 25% ownership makes ICDC the the largest minority shareholder in Uchumi giving it a significant clout.

Uchumi become bankrupt under the chairmanship of Chris Kirubi. Kirubi used his closeness to Kibaki to appoint his relative Kennedy Thairu as the Chief Executive. Later on Kirubi hired a South Africa Manager to, he claimed, rescue Uchumi, that was only but a smokescreen. Before Kirubi, the chairperson was Edda Gachukia.

We all know that Kirubi launched a Sh1.2 billion rights issue. Uchumi did not make a full public disclosure of its financial results before launching the rights issue. The public were fooled into buying Uchumi shares. Uchumi then sank deeper into loss after funds were siphoned off. Kirubi did not secure an underwriter of the right issue. Typically, investment banks guarantee rights issues up to the minimum subscription amount required. This is refunded in the event that the minimum subscription is not achieved. I remember reading somewhere that the auditors concluded that the accounts have been prepared on a ‘Going Concern basis’ meaning that an assumption was made that Uchumi has the ability to make enough money to stay afloat, in spite of its in-ability to service short-term debts. Uchumi collapsed and became insolvent after failing to pay its creditors. Its shares were being traded to the day it collapsed. That meant that the company must have lied to its shareholders about its financial wellbeing. It is clear the collapse started with Kirubi and Thairu. Uchumi was raped to the core and was left bankrupt in barely a year of Kibaki becoming the President.

Its over a year since the collapse of Uchumi – it is not a surprise the NSE has not produced its report on the collapse of Uchumi and made payment to the coned Kenyans who were tricked into buying Uchumi shares without being warned that Uchumi was in difficulty. Uchumi was intensive care yet its shares were trading as normal! James Mbaru, James Wangunyu, P. Njerenga , all senior members of the board of NSE are Kibaki golfing buddy!

I can only infer that the funds stolen from Uchumi and else where is now used to boast Kibaki's election kitty. And more money will be stolen if Uchumi shares resume trading prematurely.


Alex

The right word is corroborate.

[kamalet]

Sadik,

I think we can exchange words here endlessly without gaining anything especially when we do not provide fact and truth. If teh PWC forensic report has never been made public , then how did you know about the loss in billions in the disposal of assets?

Here are some facts that you may be interested in:

This article in the Standard talks of millions and certainly not billions siphoned from the corporation:http://www.eastandard.net/hm_news/news.php?articleid=1143962849

With regard to the loss in the sale of its houses, the amount quoted by the auditors is 87.9 million:http://allafrica.com/stories/200701230637.html

What about our struggling Uchumi? You are wrong to suggest that ICDCI owns 25% of Uchumi. Please note that ICDCI sold all its holdings in Uchumi before the company went under. First ICDCI refused to take up the rights issue shares and this considerably reduced its holding in the company before finally selling the shares to Naushad Merali through the NSE.

Kirubi was chairman of Uchumi by virtue of being largest single shareholder. He resigned from chairmanship one year before Uchumi went under and was replaced by Edda Gachukia and not the other way round.

The biggest mistake that Kirubi made, and we seem agreed here, was the recruitment of Thairu. Under Thairu, Uchumi made some investments that were way out of its core business. The investment in and ERP system that did not work as well as the misguided thinking that buying land and building own shops was more sensible than leasing the buildings where the rent can be matched to sale per square foot. This is what finally brought Uchumi down!

Job has questioned the issue of KPLC shares being on the board of NSE as a block. Perhaps this article about Transcentury which also explains how they got KPLC may be helpful. www.nationmedia.com/dailynation/downloads/BizSunday190206.pdf

I am a believer in investing in stocks not just in kenya but elsewhere. You can make the choice not to participate - in your case moral reasons being the excuse - but it would be wrong to tell the thousands of Kenyans that are investing in the NSE that they are a bunch of silly idiots being cheated into investing by thieving kikuyus.

[Daktari wa makazi]

Kamau

C'mmon, the fact that PriceWaterHouseCoopers Report on Kenya Re has not been made public was in the press. Here

www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=3&newsid=95835


www.eastandard.net/hm_news/news.php?articleid=1143967265

By the way, I provided these links in my initial post. The NSE/CMA Uchumi Report is also not in the public domain.

We all know the regulatory mechansim at the NSE are very weak and have been manipulated frequently. To pass the buck on the unsuspecting public is unfairly wrong. Any bourse worth its name need a stringent mechanism of control to protect the public from been fleeced. Unfortunately, NSE does not have that mechanism in place making it easy for scrupulous traders to make a killing.

[kamalet]

Sadik,

...which confirms I disagreeertion that it was not billions stolen. Kimunya talks of 35 million and I am suggesting that the figure could be higher than that probably closer to 50 million. These amounts will pale against the financial strength of the corporation.

But back to what you wanted discussed and this was Kenya re shares (not sure where lost it and ended up with other shares ;D ).

The government has in its wisdom decided to sell of some of its corporations. The fact that they are not selling kenya re to a "strategic partner" (which in my mind is the euphimism for let us steal) but to kenyans through an IPO points to a higher degree of transparency. This should be welcomed and encouraged with respect to other parastatals. But before selling them off, they will need to be restructured to make them profitable and attractive to prospective buyers. I do not think that merely because a corporation is profitable it should not be sold, as I think government involvement in business constitutes effective industrial control and conflict of interest. The privatisation of Kenya re will mean that the government can no longer compel Kenyan insurers to reinsure with Kenya re as is the case today which means kenya re would compete on the same footing with other reinsurance players in the market. If you ask me, that is good business sense!

But is Kenya re an attractive buy? The financial fundamentals of Kenya re will make it a competitive stock especially for those that understand the insurance/reinsurance market. As a result, for Kenya re to attract those other Kenyans that would like to buy a share in it, it must aggressively educate the Kenyan on what it does. That is why I will not buy the Somen family shares in Access Kenya and will save up to buy Kenya re when the shares are eventually rolled out.

[roughrider]

Kamale;

Why is there a freeze on licensing new stockbrokers? Look at the stockbrokers we have in kenya today - they are mostly a bunch of thieves, playing games with investors' money and engaging in endless insider trading. I dont trust them at all.

Thank God some Ruskis with deep pockets are coming to town - nitatoroka haraka sana!