The Government has pushed through its agenda in the conversion of preference shares held in National Bank of Kenya (NBK), dealing workers' pension savings at the public pension fund a huge blow. Implications of the agreement will be significant, especially at KCB, which is in the process of finalizing the complete takeover of NBK. Individual and institutional investors will be the biggest losers in the agreed structure with their shareholding diminishing from 29.5 per cent to about 6.7 per cent The Government has leapfrogged the National Social Security Fund (NSSF) as the biggest shareholder in NBK, thanks to the hitherto elusive agreement. Jointly, the two entities control nearly 93.2 per cent of NBK, pending shareholder approval on the treatment of the 1.2 billion preferential shares. In the proposed formula, the preference shares will be converted one-for-one with ordinary stock, which constitutes the actual ownership. Holders of preferential shares earn a predetermined dividend over time, but do not have voting rights, unlike for ordinary shares. NBK Company Secretary Habil Waswani has announced that the retirement of the preference shares will be an item of discussion in the upcoming annual general meeting slated for June 14. He added that the proposals would be subject to regulatory approvals of the takeover of the bank by KCB - the country's biggest lender.

True, in government safety is found.. Diluted or not.. Atleast it won't be put under an administrator

That is serious dilution for minority shareholders. Saad.