Some fellow by the name Jeremy Kinyanjui sent me the following email....it read's like the sort of thing you'd find in the gutter press......enjoy it......
21st November 2009
Corruption at Safaricom Kenya
There appears to be a lot that is troubling wrong at the biggest corporation in East & Central Africa i.e. giant mobile phone service provider,Safaricom Kenya.
Financial,technical and intellectual systems for one,are clearly stretched at Safaricom Kenya,and are at breaking point.
Safaricom Kenya for instance,was meant to pay out a dividend of 10 Kenya cents per share on 9th November 2009,but there is no indication that this has been done (refer to the Safaricom Kenya Annual Report & Accounts for the financial year ended 31st March 2009,both hardcopy,& softcopy i.e.
www.safaricom.co.ke)
When a dividend for a publicly quoted company falls due,the practice is that formal announcements & protocols are set in motion,including formal notification of the declared dividend being made to the shareholders of the company,the Capital Markets Authority & the Nairobi Stock Exchange,by the publicly quoted company in question. Should any changes to the defined timetable arise for one reason or another,then the three key parties i.e. the shareholders of the company,the Capital Markets Authority & the Nairobi Stock Exchange,should again be immediately notified about the revision,and if need be,penalties/sanctions/reprimands applied on the Board of Directors & Management for this lapse.
Safaricom Kenya is in a financial crisis by every indication. Safaricom Kenya carried out a month and a half long exercise asking shareholders to sign up and receive their dividends by way of Safaricom Kenya's M-Pesa money transfer service. As at the date of this letter i.e. 21st November 2009,there is no indication that payment of dividend has been effected to Safaricom shareholders who opted to receive their dividends through Safaricom Kenya's M-Pesa money transfer service,bearing in mind that Safaricom Kenya was meant to effect dividend payment for the financial year ended 31st March 2009,on 9th November 2009,as stated above.
Even then,the decision by Safaricom Kenya to use M-Pesa to pay the 2008/2009 dividend to a substantial number of it's shareholders,reeks of deceit and outright theft of it's shareholders in particular,and the people of Kenya in general.
According to data released following the high profile Safaricom Initial Public Offer of March 2008,the majority of retail shareholders were allocated 420 shares each following massive over-subscription. Safaricom incidentally,has approximately 850,000 shareholders,almost all of whom are small scale retail shareholders.
As mentioned above,Safaricom Kenya is meant to pay out a dividend of 10 Kenya cents per share for the financial year ended 31st March 2009. This means that majority Safaricom Kenya shareholders are set to get a dividend of 42 Kenya shillings for the financial year ended 31st March 2009. It is claimed that that the Kenya Government does not deduct a 5% withholding tax for locals (i.e. Kenyans),for any dividend payment less than 50 Kenya shillings. The Ministry of Finance/Treasury is yet to confirm this,but assuming that it is indeed a statute in Kenya fiscal law,then majority Safaricom Kenya shareholders will therefore get a dividend of 42 Kenya shillings.
Now here's the bombshell... Safaricom CEO Michael Joseph & Safaricom CFO Les Baille,claim that about a quarter of it's retail shareholders (approximately 212,500 shareholders),registered to receive their dividend payments for the financial year 2008/2009 by way of Safaricom's M-Pesa money transfer service. Safaricom Kenya charges 30 Kenya shillings for such M-Pesa money transfer transactions,meaning that many of the stated 212,500 retail shareholders,will receive a net payment of 12 Kenya shillings. What's more is that if there is no statute in Kenya fiscal law allowing for a waiver of withholding tax of 5% for any dividend payment less than 50 Kenya shillings,then the saga gets even more comical,because 5% of 42 Kenya shillings is Kenya shillings 2.10. Net dividend after deduction of 5% withholding tax for many retail shareholders will therefore come to Kenya shillings 39.90. A majority of Safaricom Kenya retail shareholders receiving their dividends through the Safaricom M-Pesa money transfer service,should therefore receive a net dividend of Kenya shillings 9.90 after the M-Pesa transaction fee of Kenya shillings 30 is deducted. This is assuming that there is no statute in Kenya fiscal law allowing for a waiver of withholding tax of 5% for any dividend payment less than 50 Kenya shillings. The difference anyway between Kenya shillings 12 and Kenya shillings 9.90 is not much. It is Kenya shillings 2.10,which is not even enough to send a local text message in Kenya.
How about the remaining approximate 637,500 Safaricom Kenya shareholders? Why have they up to now not received their dividend cheques for the financial year ended 31st March 2009? These were meant to have been despatched on 9th November 2009 as mentioned above. Inspite of the fact that many of the remaining 637,500 shareholders will receive net dividend cheques of either Kenya shillings 42 or Kenya shillings 39.90,and inspite of the fact that Safaricom Kenya has made no arrangements and/or provisions for how these low value dividend cheques will be cashed,why have the dividend cheques not been mailed out yet? Is it because Safaricom Kenya does not have the money? Is it because Safaricom Kenya is broke? Is Safaricom desperately scrambling to raise funds to pay the 2008/2009 dividend,by amongst other ways,the just launched low denomination,lower market end Kenya shilling 10 & Kenya shilling 5 calling cards? Safaricom Kenya is desperate & is doing little to conceal it.
The company reportedly made a very attractive gross profit of 45 billion Kenya shillings for the 2007/2008 financial year and an equally attractive gross profit of slightly less than 40 billion Kenya shillings for the 2008/2009 financial year. These are huge huge sums of money. Even assuming a flat Kenyan corporate tax rate of 30%,the quoted revenues would translate into approximate net profit amounts of Kenya shillings 31.5 billion and 28 billion for the financial years ended 31st March 2008 & 31st March 2009,respectively. Where is all this money? Where are all these so called 'reserves'? Are they fictitious? Are they illusionary? Are they just on paper? Are these just doctored figures that keep being prepared & presented to the public?
Safaricom Kenya has an issued share capital of 10 billion ordinary shares. Safaricom Kenya made a staggering 50 billion Kenya shillings during it's stated initial public offer of March 2008,because each Safaricom Kenya share retailed at 5 Kenya Shillings during the initial public offer. Add to this the staggering attractive approximate net profits above of 31.5 billion Kenya shillings & 28 billion Kenya shillings for two years in a row,and it becomes really baffling why Safaricom Kenya is not able to pay a dividend of only Kenya shillings 1 billion for the financial year ended 31st March 2009,and why they are openly fleecing it's shareholders and Kenyans in general,by further stealing 30 Kenya shillings from every one of the approximate number of 212,500 shareholders who have 'opted' to receive their dividends for the 2008/2009 financial year via Safaricom Kenya's M-Pesa money transfer service. The Safaricom Kenya dividend payment for the financial year ended 31st March 2009 comes to merely 1 billion Kenya shillings in the circumstances,because an issued share capital of 10 billion ordinary shares multiplied by the declared dividend of 10 Kenya cents,comes to only 1 billion Kenya shillings,a pittance for the 'giant' Safaricom Kenya,the 'biggest' corporation in this region i.e. East & Central Africa.
Safaricom Kenya has also just issued a corporate bond for 2 billion Kenya shillings,and reported that it will issue similar such corporate bonds in phases. Why is a company with such huge reserves borrowing such small amounts of money from a hard pressed Kenyan public? Why does a company that has made huge staggering approximate net profits of 59.5 billion Kenya shillings over a two year period,have to go back to the Kenyan public to borrow a mere 2 billion Kenya shillings for it's 'expansion' programmes. Moreover,this is in the midst of it’s failure to release a declared dividend for the financial year ended 31st March 2009 for a small amount of 1 billion Kenya shillings.
Safaricom Kenya is in a heavily desperate situation & I would personally not be surprised to even hear that they have not paid their employees and/or suppliers. One even wonders what the real state of numerous other smaller Kenyan corporations/enterprises/businesses is.
Safaricom has resorted to sending all manner of annoying,valueless,irritating & nonsensical near daily promotions to it's huge subscriber base of close to 10 million users,amongst other things,merchandising 'branded' laptops at 'throw away prices',asking subscribers to sign-up for English premier league updates for the 'Big 4' English football teams i.e. Manchester United,Chelsea,Arsenal and Liverpool,and asking subscribers to download ring tones and/or 'Skiza' tones from
www.safaricom.co.ke. One of the annoying,valueless,irritating & nonsensical promotions even asked subscribers to download 'gospel' tones from
www.safaricom.co.ke at 'premium rates',disregarding the fact that a huge number of Safaricom Kenya subscribers are not Christians. This is extremely insensitive & outrageously fails to recognise the cosmopolitan nature of Kenya's people,showing indeed,just how desperate Safaricom Kenya is. I mean why not just send out promotional text messages in Kikuyu,Luo,Gusii,Kalenjin,Taita,Kamba,Meru,Luhyia,Maasai,Somali,Samburu,Borana,Dorobo,Rendille,Gujarati,Sheng or any one of the numerous other dialects in Kenya,if this is the case.
One also wonders what Safaricom Kenya sets out to achieve in sending out promotional text messages for it's branded laptops that they claim cost 'only' Kenya shillings 19,999. Are they targeting lower market end subscribers for whom they have just launched low denomination Kenya shilling 10 and Kenya shilling 5 calling cards for and for whom they look set to also further soon launch a Kenya shillings 2 calling card for,or are they targeting the higher end of the market that already owns laptops?
This country is in serious trouble. Who else is enjoined in the Safaricom Kenya conspiracy of deceit,open lies and open theft? The Capital Markets Authority,the Nairobi Stock Exchange,Parliament,the Ministry of Finance/Treasury?
In general,this is a good time to tread very cautiously. Safaricom Kenya is in dire straits,but so is the rest of the Kenyan economy. The Kenya Electricity Generating Company (KENGEN),has just announced the 'successful' subscription of it's just issued corporate bond. East African Portland Cement has also just announced that it will soon issue a corporate bond to help offset it's huge loan servicing obligations pegged to the Japanese yen. Pan African Paper Mills,Webuye,is insolvent. The giant Kenya Planters Co-Operative Union (KPCU),is also insolvent. Uchumi Supermarkets is also desperately trying to remain relevant with all manner of announcements of the flashy financial instruments that they shall use in their recovery,despite the failure of their debenture issues. Barclays Bank of Kenya is also a big player in the long term syndicated corporate bond market,despite having declared enormous profits for a continuous 17 year period. Similarly,Kenya Commercial Bank recently saw the need for a rights issue despite also having declared huge profits for several consecutive years. The Kenya Government itself is heavily borrowing from the Kenya public and from overseas,and has only just announced a subscription 'extension' of it's Infrastructure bond,'owing to great public demand',another way of saying,'Please guys,buy this bond... We are not playing and desperately need the money!'
The global financial crisis whose 'de facto' commencement can be said to be the spectacular September 2008 collapse of Lehmans Brothers in the United States,has noticeably began arriving in Kenya.
Behind the gardens...Behind the wall...Under the tree (Including: Red...Dark Blue...Yellow)
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.