[kictanet] It's a new twist for Econet Wireless

[Mike Theuri]

One cannot envy the PS for he is in a difficult situation trying to
extricate the government from a situation which would never have occurred
had those responsible (long before the tender concluded) abided by the law
and struck out the litigant based on publicly and widely available
information during the pre-qualification stage of the tender. Even though
some might disagree, two wrongs do not make a right, and history no matter
how long it takes to get there will be the judge of this government's
actions. As was the case, while the Government was fighting the litigant in
Kenyan courts, a different arm of the Government was bizarrely engaged in a
PR campaign on behalf of the litigant in a foreign country! Was the
litigation in Kenya a mere public relations exercise to show Kenyans that
the government tried to do something so that Kenyans could mistakenly
conclude that atleast the government 'fought tooth and nail' ?

The government cannot claim to know it did not know what kind of 'animal' it
was dealing with when it allowed the litigant to get past pre-qualification
while international telecom giants with more experience, cash and expertise
in African countries were knocked out. A long time back in 2001, some of
Kenya's best and brightest technocrats investigating the litigant's attempt
to purchase Telkom Kenya went on a due diligence expedition (something the
regulator should have undertaken). The delegation included: Mwaghazi
Mwachofi (Treasury PS), Francis Muthaura, Esther Koimet (Investment
Secretary), Augustine Cheserem (TKL), Dan Ameyo (AG Chambers), Mr Davis
Chirchir (TKL). This delegation compiled a report which should be made
available to the public and which explains in part the litigant's current
attempts to obtain the licence without paying in full for it (part of its
modus operandi). Per the Daily Nation, Business Week of November 27, 2001
some of Kenya's brightest minds found that:

--------------------
       Although this, on the face of it, would appear to be a moot point,
the
       undercurrent would appear to be a suspicion that the South African
company's
       plan was to borrow funds from the financial market using Telkom
Kenya's existing
       balance sheet.

       In the team's view, this was an inequitable arrangement, the argument
being that
       the South Africans wanted to reap where they did not sow.

       According to informed sources, the final conclusion of the report was
even more
       controversial.

       "These people have categorically stated in their report that the
government
       should not have pre-qualified the Mount Kenya Consortium in the first
place," a
       key insider confided to BusinessWeek.
-----------------------

If one walks into a bank and fraudulently obtains a Ksh 10 million loan,
they are liable to possible prosecution for the illegal procurement of the
loan through fraud, misrepresentation and false pretences. The bank can
recall the loan, and it can also seize the individual's collateral in
addition to pursuing civil and criminal actions against the individual. The
cases against the government were cases to be won by the Government and not
the litigant, vast information proving misrepresentation at the
pre-qualification stage, collaboration in planning the tender and throughout
the course of the tender is in the public domain. All the Government needed
to do is provide proof of these actions (of which there is plenty including
through KACC investigations). Just one instance indicates that the tender
committee moved the technical evaluation date of the tender such that the
ITU (International Telecommunications Union) representative and observer,
Mr. Ricardo Passerini, who was to be an observer was not present to observe
the process. Unlike Kenya, the Morocco tender which raised over $1bn+ fully
engaged the ITU in its tendering process and is held up as an example of
successful and transparent tender. Can the same be said of the Kenyan
tender?

The second case against the Minister was also winnable. Parliamentary
privilege protected what he said. Secondly what he said was perfectly true
and provable in any court through thousands of documents and through
obtainable testimony by the litigant's own insiders and former employees.

Perhaps the Attorney General's qualified opinion on these matters which was
presumably obtained should be made public or discussed in parliament or
released by the PS for the air to be cleared once and for all so that
Kenyans can understand how these cases could have been lost in the face of
overwhelming evidence, certified financial audits of the litigants
demonstrating they did not meet the tender requirements amongst several
other defence mechanisms the government could have utilised and obtained to
win its cases.

Incase there is any lingering doubt about the existence of a modus operandi
by the "seasoned and very experienced" litigant one only needs to look at
the similarities between the KNFC situation (abandoning agreements) and the
Altech partnership situation:

-------------------
          The CEO of Altech, Mr Craig Venter, says over the past three
months Altech has
          exhausted every avenue possible to find an amicable solution with
Econet. Altech
          therefore had no alternative but to resort to the just and
equitable winding up
          application after Econet purported to cancel the shareholder's
agreement and
          then took other steps designed to weaken Altech's position within
the joint
          venture.

http://www.altech.co.za/content/news_corporate_display.asp?sCompanyName=altech&sNewsArticleID=35
-------------------

As to the possible claims about 1-2m subscribers, its just an extension of
the modus operandi used by the litigant in several other countries. In Papua
New Guinea they purported to offer a minuscule $48m for the National
Operator, later when they went to court against the PNG government, they
sued for $1bn claiming this was what the operator would have been worth to
them!! Needless to say the case did not go far, a sovereign government has
the inalienable right to accept or reject a bid which it rightly did.
Kenyans should learn not to succumb to an entity whose track history shows
it has not won any of its massive lawsuits except the one lawsuit that
enabled them to start business in Zimbabwe.

On 7/25/07, Bill Kagai <mediacorp.research at mediacorp.co.ke> wrote:
>
>
> This is a murky area by any standards, but the PS made it abundantly
> clear, that the Govt opted to discuss the specific cases initiated by
> Econoet against itself....
> The rest [KNFC et al] according to my understanding are still in court.
>
> You can imagine, if Econet won some cases against Govt and then estimated
> they would at least have had 1-2 million subscribers [if they did not have
> to go to court] then settlement would turn into billions of my and your
> money as taxpayers. Its the best way out of this quagmire.
>
> Bill Kagai
>
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