[kictanet] [SPAM] [Skunkworks] Telkom Kenya is not this cheap sign petition.........

[Mike Theuri]

Jean,

I appreciate your response. I would hope that more Kenyans would participate
in constructive debates over matters of national importance particularly
those that affect them and future generations of Kenyans.

It does not take rocket science to figuratively determine why TKL which in
the past charged some of the highest tariffs in the world has not made a
profit. To date no one has been prosecuted and ultimately convicted for
pilfering public funds generated by this very viable corporation. TKL
represents a classic example of gross mismanagement, attempts to turn around
the corporation have encountered several avoidable obstacles and the status
quo has remained. In contrast other publicly owned corporations such as KCB
have been turned around and turned into very profitable entities without
being sold to alien companies while transitioning to minimal governmental
ownership and ensuring maximum equity participation by the Kenyan public.

One must wonder if this cheap sale is intended to clean the slate of the
years of pilferage and mismanagement while conducting a well though out
public relations exercise to show that the current administration is engaged
in doing something "good for the country" as opposed to doing something good
for foreigners.

TKL has turned around a corner and has revamped its infrastructure at great
expense. Several exchanges have been upgraded and digitized and so has its
domestic digital network.  It has retrenched the unnecessary and redundant
workers who were a drag on its ability to be profitable (again paid for by
the Kenyan taxpayer).  Just when TKL is on its home stretch to launching
several new and revolutionary services, there is a sudden and urgent need to
dispose of it to foreigners or combat it by companies that have been making
millions of dollars from Kenyans (read foreign companies). Can these
companies explain how they may have acquired 3G frequencies from the
regulator without paying a cent when similar frequencies have been sold in
other African countries for hundreds of millions of dollars? Can the
Exchequer let the Kenyan public know the amount that it received from the
companies that are now complaining about TKL's new services in return for
this finite 3G public resource that should not be handed out for free ? When
were licenses for 3G technology publicly tendered for in Kenya ? Is it a
good thing for Kenya that the exchequer be deprived of much needed revenue?
If TKL is not viable why are these competitors complaining?

Indeed it was patriotism that was the foundation of my comments but not the
single one driving factor. The government is by the people for the people.
The people here happen to be Kenyan taxpayers and voters. What is
unpatriotic or misguided about asking for accountability as to why a
corporation that is publicly owned is being sold for pennies on the dollar
? or asking that prosecutions be undertaken for those guilty of the prior
pilferage of public funds from the same corporation? There is nothing
absolutely misguided about questioning why the government appears to have
disregarded national security and the public's interest in attempting to
sell TKL. I'm certain that if the decision to sell TKL under the current
status quo to foreigners were put to a public referendum, that it would be
soundly defeated.

Below is an article that sums up the concerns of many Kenyans who have come
to know about the illusionary effect of corporations that are Kenyan by name
but foreign in all other aspects. Contrary to what many belief, Kenya's
wealth is in the hands of foreigners and the attempt to sell TKL is another
step in the same direction.

The best that could happen would be to follow the KQ model of privitisation
which some are advocating and which has ensured that the ordinary Kenyan has
an opportunity to benefit, no matter how small from the millions of dollars
in profits generated in profits and without forgetting to correct the harm
cause by those guilty of the pilferage of public funds and revenue. The
government's intentions may be noble but those in Government must not forget
that they are in the government for and on behalf of Kenyans who have
entrusted them with the public's wealth. Thus Kenyans must come first before
foreigners, after all it is their country and their corporation that is at
stake.

Mike


http://www.eastandard.net/archives/sunday/hm_news/news.php?articleid=18216
Kenya's wealth in foreign hands
By Kamau Ngotho

The bulk of Kenya's wealth is in foreign hands, according to statistics
obtained
exclusively by The Sunday Standard.

If Kenya were a cake to be shared out, Kenyans would only lay claim to 31
per
cent of the country's total wealth. The rest would go to foreigners.

Agriculture, tourism and banking, which combined bring in the country's
largest
earnings, are in foreign hands. Last year, tea, tourism, flowers and coffee
earned the country Sh140 billion, nearly half of the annual national budget.
Of
this money, only 31 per cent ended up in the country — as tax and real
earnings
to the nationals.

And shareholding in the richest 20 companies that trade at the Nairobi Stock

Exchange is foreign.

The skewed distribution of wealth between foreigners and Kenyans puts paid
to
all efforts since independence to hand control of the country to its
citizens.

Tea growing, which earned the country Sh43.5 billion last year, is
concentrated
in the hands of six leading agricultural companies whose shareholding is
largely
foreign. Up to 78 per cent of earnings from tea went, therefore, to
foreigners —
leaving the balance for Kenyans.

The Big Six in the tea sector are Unilever Tea Kenya, Kakuzi Ltd, Williamson
Tea
Company, Kapchorua Tea, Limuru Tea Company and Sasini Coffee and Tea.

The British-owned Brooke Bond Group holds 43.1 million shares of the total
48.8
million shares issued in Univeler Tea Kenya. The same group owns 54 per cent
of
the total 3.9 million shares issued in Limuru Tea Company.

In Kakuzi Ltd, foreigners have a total shareholding of 68.3 per cent of the
total 19.6 million shares issued. They hold the shares through Bordure Ltd
and
Lintak Investment Ltd, with 35.1 and 33.2 per cent shareholding,
respectively.

Britain's Williamson family has a controlling majority shareholding in both
Williamson Tea and Kapchorua Tea companies. In Williamson Tea, it holds 67.2per
cent of the total 8.8 million shares issued through their company, Ngong Tea

Holding PLC.

In Kapchorua tea, they hold 40 per cent of the 3.9 million shares issued.

Sasini Tea and Coffee Ltd is 87.3 per cent owned by business magnate Naushad

Merali, a Kenyan. Merali's companies hold his shares in these businesses:
Legend
Investments Ltd (51.7 per cent), East African Batteries (18.7 per cent),
Yana
Towers (15.9 per cent) and Swan Estates (1.04 per cent).

The reinvigorated tourism sector, which earned Sh42 billion last year, is
also
foreign-owned.

And just as the Sh43.5 billion earnings from tea sector ended up in foreign
pockets, so did the Sh42 billion that came from tourism. Tourism earnings
went
into three directions: Hotels, airlines, and travel/booking agents, in that
order. Of Kenya's 290,000-plus tourist hotel bed spaces, foreign hoteliers
own
74.3 per cent of it.

Tour flights to Kenya are entirely in the hands of foreign airlines. It is
all
the more foreign-dominated in the traditional tourist peak periods of Easter
and
Christmas, when there are no scheduled flights to Kenya's tourist hub of
Mombasa. During the two seasons, tourists arrive in Mombasa in chartered
jets
arranged by European tour operators.



Foreign companies stationed in European and American capitals also entirely
control hotel bookings and transfers. Where internal travel is concerned,
foreigners too, dominate by owning 7 of the 11 leading local tour travel
firms.

At the end of the day, tourism in Kenya remains a foreigners' enclave with
indigenous Kenyans left to scratch the surface on petty trades like selling
curios and prostitution.

After years of lobbying, last year the European Union set aside Sh250
million to
economically empower indigenous Kenyans to get a fair share of the lucrative

industry. Seven projects were targeted to tilt the balance in a programme
called
Tourism Diversification and Empowerment Project.

But a spokesman at the Nairobi EU office said the money is yet to be
released as
project proposals submitted are still under evaluation.

The only hotel chain listed on the Nairobi Stock Exchange is the TPS Serena.
The
Aga Khan Fund for Economic Development holds the company's majority
shareholding
through its company, TPS Holdings Limited.

Horticulture, which earned Kenya Sh28.2 billion last year, is the country's
third largest foreign exchange earner. It, too, is a foreigners' affair.
Indigenous Kenyans mainly come in as casual labourers on the flower farms.

Of the 44 certified companies dealing with horticulture products, 26 are
foreign-owned. But an even bigger irony is that the leading 10 players in
the
industry — all foreign-owned — bag 83 per cent of the total income from the
sector.

Flower farming (floriculture) is the key plank in Kenya's agriculture
sector.
Seventy six per cent of Kenya's total flower production is concentrated in
foreign-owned flowers farms around the Naivasha area. The big three are
Homegrown, Sulmac and Oserian.

Late last year, Kenya overtook Israel and Columbia as leading exporters of
cut
flowers. But you would not know that from the world's leading flower
auctions in
Amsterdam and London. Why?

Foreign flower exporters in Kenya have registered their companies abroad —
mainly in Amsterdam — and sell flowers they have grown in Kenya under a
foreign
label. In that case, while flowers from a local company are sold in
Amsterdam as
flowers from Kenya, Dutch companies growing their flowers in Naivasha sell
theirs as flowers from Holland.

The consequence of it is that flowers owned by Dutch companies receive
preferential treatment at the auction, including exemption from the strict
EU-
imposed export rules.

Flower auctions in Amsterdam and London account for 65 and 25 per cent of
Kenya
flower sales respectively. Of the approximate 60,000 tonnes of flowers
exported
from Kenya last year, 37,000 tonnes were sold in Amsterdam and London
auctions
as flowers from Holland.

The statistics can make it look like the entire flower industry in Kenya is
one
big conspiracy against indigenous people. Foreign air charters, the only
ones
used in flower transport, charge the highest rates in Nairobi. Freight
charges
on flowers from Kenya are twice those in the capitals of Kenya's nearest
competitors Israel, Columbia and Costa Rica.

There are also 40 to 45 per cent higher than in Egypt and South Africa,
Kenya's
two biggest competitors on the continent.

At $400 a day, inspection and storage charges at Jomo Kenyatta International

Airport are the highest in the world. So is the freight charge of $1.85-$2.2
per
stem.

Flowers sold in Kenya's name are inspected stem by stem at the JKIA at the
cost
of 12 Euro cents a stem. Those grown in Kenya but marketed by overseas-
accredited companies are only inspected in bulk.

On average, it costs upwards of $1 million to set up a typical flower farm
on a
half acre spread , which in turn brings in a $50,000 a year.

Kenya's fourth leading export earner, coffee, is equally depressing on the
ownership scale. The majority of small-scale coffee growers in Kenya sell
coffee
raw from the farm, earning less than 10 per cent of what the finished end
product earns in foreign markets and in a foreign label.

Though touted as an agricultural country, the other large-scale agricultural

activities in Kenya are also foreign-owned.

Rea-Vipingo Plantations, which deals mainly in sisal and dairy farming is 77
per
cent owned by the Robinson family of England. They hold the shares through
REA
Holdings PLC, Unibuckle Holdings Ltd and REA Trading Ltd.

Del Monte, world famous for pineapple products, is entirely a French affair
and
sells its products with the label "Made-in-France".

The question of who owns Kenya's wealth sticks out like a sore thumb in the
banking sector. The leading two banks with a combined market share of 71.4per
cent are Barclays Bank of Kenya and the Standard Chartered.

They are foreign-owned. Barclays Bank plc of London owns 68 per cent stake
in
Barclays Bank of Kenya.

Standard Bank Africa, a London outfit, in turn owns 81 per cent shareholding
in
Standard Chartered Bank.

To avoid domination by foreign banks, Nigeria and South Africa enacted laws
on
percentages of shareholding a foreign bank could own.

Foreign ownership is also the same cord that runs through key blue chip
companies listed on the Nairobi Stock Exchange.

At the East African Breweries, British-owned Guinness plc holds 63.5 per
cent of
the total equity, leaving Kenyans to scramble for the rest. Guinness shares
are
held in the names of Diageo Kenya Ltd and Diageo Netherlands B.V.

In the Nation Media Group, the Aga Khan holds 28.2 million shares of the
35.6
million shares issued. The Aga Khan's shares are held in the names of the
Aga
Khan Fund for Economic Development and Amin Nanji Juma. In Kenya Airways,
Dutch
company, KLM, holds 40.6 per cent equity.

In Total Kenya Ltd, French companies Total Outre-mer and Elf Oil Kenya Ltd,
own
77 per cent of the total shareholding, while in BAT Kenya Ltd, Molensteegh
Investment BV of London, holds 68 per cent of the total shareholding.

The question of who owns Kenya's wealth generated a national debate in 1968
when
the National Council of Churches of Kenya published a paper entitled: "Who
Owns
Kenya's Industry?" In the paper, the late Anglican Bishop, the Rev Henry
Okullu,
regretted that five years into independence, "the compass needle had not
moved
in the direction of indigenous ownership of Kenya's wealth."

Thirty-seven years later, the Rev Okullu would turn in his grave to note
that
the needle has drifted even further away.

On 7/11/07, Jean-Antoine BORD <ja_bord at yahoo.fr > wrote:
>
>  Hi,
>
>
>
> With due respect, I am not convinced that you asked all the good
> questions.
>
>
>
> To what I have heard so far, Telekom has succeeded neither commercially
> nor technically in the few past years. A significant part of its
> infrastructure is considered obsolete if not out of order. I heard many
> times that the service was quite poor and that one should wait several years
> to get a land line. Telkom seems to have given up long ago its leadership in
> Kenya to cell phone operator and successful ISP like Access Kenya, KDN, etc.
> So, in a certain way, because of possible debts or potential expenses which
> do not appear in the asset sheet, the valuation of Telkom might be less than
> its licences.
>
>
>
> When you consider the status of Telecom national historical operators in
> other countries, you should first ask the government why Telekom Kenya has
> so poorly achieved in the last 5 years.
>
>
>
> When a company decide to go for an IPO (particularly when this is a
> government-owned company), the non-professional investors should have a
> minimum insurance that the price is fair and the company is sustainable.
> Here is a second question.
>
>
>
> Another issue is the transparency of the process. In many countries,
> private companies backed by Venture Capital Funds ran in parallel an IPO and
> a trade sale. For instance, Kelkoo, Skype, etc, have been acquired
> respectively by Yahoo and eBay instead of going public, because it was more
> interesting for the existing shareholders. So, an IPO is not always the best
> way (many companies experienced a crash of their stock a short time after
> their IPO; investors who could sell some stock where considered as thieves).
>
>
>
>
> Last but not least, the service level in Kenya is still poor and to turn
> Telkom Kenya into a company leading the progress of this industry (instead
> of trying to slow down the competition) would probably have a better impact
> on the economy (and what you call Telkom's shareholders) than the loss
> inducted by the sale of 40% at a price you consider too low.
>
>
>
> Finally, Kenyan Government has demonstrated with the Safaricom deal (and
> probably many others) that it is able to defend the best interest of all
> Kenyans, so that one should not consider it is guilty without an equitable
> judgement.
>
>
>
> I could have developed some more arguments, concerning the role paid by
> Safaricom, Celtel (which are partially owned by foreigners) and many other
> foreign owned companies which create wealth in Kenya, concerning
> protectionism and its consequences, etc.
>
>
>
> In conclusion, the mail written by Mike seems biased by a misplaced
> patriotism and many issues have not been considered.
>
>
>
> With Kind Regards,
>
>
>
> Jean
>
>
>  ------------------------------
>
> *De :* skunkworks-bounces at my.co.ke [mailto: skunkworks-bounces at my.co.ke] *De
> **la part de *Dorcas Muthoni
> *Envoyé :* 10 July 2007 20:21
> *À : *skunkworks at my.co.ke
> *Objet :* [SPAM] [Skunkworks] Telkom Kenya is not this cheap sign
> petition.........
>
>
>
>   http://www.petitionspot.com/signature/TELKOMKENYA
>
> ---------- Forwarded message ----------
>
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