News

Story by NATION Team

The Safaricom initial public offer (IPO) will go ahead despite threats by a politician to block it through a court injunction.

Finance minister Amos Kimunya said the law was on his side and the share sale would succeed despite the threats by Lang’ata MP Raila Odinga to stall the process by court order.

“I am going to fight to ensure that it goes on,” vowed Mr Kimunya during the launch of trading in Kenya Reinsurance shares at the Nairobi Stock Exchange yesterday. Mr Odinga had said his ODM party would seek an injunction to block the planned sale of the Government’s 25 per cent stake in East Africa’s most profitable company, until the issue of Mobitelea Ventures Ltd’s alleged five per cent stake in Safaricom was resolved. The Lang’ata MP also cited the fact that the Government was yet to set up a Privatisation Commission as required under the Privatisation Act 2005.

Parliament’s Public Investments Committee (PIC) also recommended that the IPO be delayed over the issue. Resources But quoting the Privatisation Act, Mr Kimunya said the law could only come into operation after he publishes a Kenya Gazette notice, which he is in the process of carrying out.

The minister said the delay was due to the need to have adequate resources in the Budget, hence the more than Sh1 billion which he provided for the programme this financial year. Mr Raila’s demands were driven by the realisation that he had no legal basis upon which to challenge the planned IPO, stated Mr Kimunya. “They (opposition politicians) are not sincere. They want me to implement the Act so that they can use it to stop the Safaricom offer.” He said the Government would continue to implement the on-going privatisation under the existing law, and the transactions would be taken over by the Privatisation Commission, whose executive director is currently being recruited.

The current privatisation of Kenya Reinsurance, Safaricom and Telkom Kenya is a process that has been delayed since the 1990s, he noted. “We are not privatising new institutions as envisaged in the Privatisation Act.” The Government will also seek to amend the Company’s Act, to allow firms to contact their shareholders by e-mail, and cut the huge costs listed companies incur, for example, when inviting shareholders to annual general meetings. “In this time and age, there is no need for companies to contact their shareholders by post,” said the minister.