[kictanet] [ke-internetusers] Re: PS Ndemo, ECONET Scandal aand Vested Interests

[Eric M.K Osiakwan]

Dear Peterson,

I go with you on the wheel that the vested interest of the country in  
paramount.....

The elements of my case though disappointing, i went with the  
established criteria since was applied across board but then in the  
situation where most of the local companies are majority owned by non- 
Africans, then one needs to look into the criteria again.

The larger question, we need to raise is how do we ensure that the  
interest of other African investors can be unheld in another African  
jurisdiction, in the context of developing Africa by Africans. You  
know the TEAMS process is still ongoing so lets allow the establish  
procedures and policies to work, am patient and dont have any hard  
feelings at all.

The other big question that we need to answer is, these huge  
infrastructure projects require huge sums of money, personally am not  
a deep pocket in that sense but at least i can raise the money, may  
be from another African country or worse case outside the continent  
if the amounts are way over. The TEAMS model where public funds are  
used to underwrite the risk in order to ensure that the entry  
barriers for investment are  minimised so local investors and  
entrepreneurs can participate are innovative and i personally want to  
give the TEAMS model a chance to succeed. We as Africans need to  
evolve solutions to our unique problems, ofcourse borrowing in same  
cases from others who have gone ahead.

Unfortunately, i would have to distant myself from some of the  
allegations though you establish them on factual basis, it would be  
good for the right authorities to follow it through so that we have  
conclusive situations. Also, those involved must be given a chance to  
present their side of the argument so that those in this forum can be  
more knowledgable. Again, if we can keep it tactful, then the common  
good is preserved for the sake of posterity.

Have a good weekend, good people.



On 10 Oct 2008, at 20:16, mwananchi at hushmail.com wrote:

> Dear Eric,
>
> At the end of the day, Kenyans only want the best for our nation.
> Kenyans certainly are not against beneficial foreign direct
> investment and welcome it provided it is conducted under policies
> that result in a win-win situation for Kenyans and the investor.
> Unfortunately the country's policies particularly those being
> fronted now do not reflect that wish, which is why it is important
> that the Government pay attention to what local and would be
> international investors are saying and strike a balance that is a
> win-win for both.
>
> In your case, had PS Ndemo stuck with his proposal that he made in
> 2007, Internet Research would not be experiencing any hurdles. The
> local component would also have been preserved in a manner not
> detrimental to your company.
>
> I hope that PS Ndemo will address the issue of your company. Kenya
> as an African country should not be deterring Kenyan or any other
> African investors who are credible and who operate and respect our
> laws and institutions instead of trampling them underfoot and in
> the one case that has been mentioned, deliberately failing to meet
> their obligations for over 4 years. These are the same types of
> investors who have been rejected by Altech, the nations of Papua
> New Guinea, Malawi, Nigeria. The same characters who failed to meet
> their licence obligations for years in New Zealand and were lucky
> to get token percentage ownership of what was left when credible
> investors took over and who in Lesotho have been engaged in tax and
> roaming link frauds.
>
> http://rapidshare.com/files/152715858/fraud_in_lesotho.pdf
>
> They finally found a safe haven to land in Kenya embraced by a
> culture of impunity where it does not matter if you meet your
> obligations or if you operate with cancelled licences provided
> powerful vested interests pave and coerce the way for you.
>
> When we reject investors whom we know such as Eric and embrace
> undesirable investors instead, it shows why we precisely are
> lagging behind in FDI. Indeed if Kenya gave investors 5 years as it
> did in this particular case to pay licencing fees, the country
> would be overwhelmed with numerous investors. As the occassion of
> Moi Day graces us today, the Moi government despite its many flaws
> was quick to realize what type of animal this was and correctly
> rejected them not just once but twice.
>
> Peterson
>
> On Fri, 10 Oct 2008 03:31:48 +0000 "Eric M.K Osiakwan"
> <emko at internetresearch.com.gh> wrote:
>> Dear Peterson,
>>
>> Thanks for establishing a set of facts and am sure the right
>> people
>> would respond to the issues you have riased. I hope the discussion
>>
>> would continue on a factual basis and not degenerate.
>>
>> I want to also present one set of facts regarding my participation
>> in
>> the TEAMS project. My company, Internet Research went through the
>>
>> entire process and indeed qualified to be allocated shares but at
>> one
>> of the proposed shareholders meeting, the issue of local ownership
>>
>> came up.
>>
>> Majority of the proposed shareholders at that meeting made the
>> argument that Kenyan tax payers money was being used to
>> "underwrite"
>> the risk associated with the project so only local operators or
>> companies which meet the local ownership structure should be
>> allowed.
>> My company and a few others which did not meet the criteria
>> establish
>> at that meeting, gracefully exited.
>>
>> My lawyers represented me at the said meeting and further on, the
>>
>> explanation of local operators meant East African companies which
>>
>> again, i did not qualify to. Now, while i really wished i was part
>> of
>> the project, i did see much reasoning in the principles
>> established.
>> However my other company which had majority Kenyan ownership got
>> allocations and is since part of the TEAMS shareholders.
>>
>> Eric here
>>
>>
>> On 10 Oct 2008, at 06:10, mwananchi at hushmail.com wrote:
>>
>>> John,
>>>
>>> Dr. Bonny Khalwale on Wednesday in parliament as Chairman of the
>>> Parliamentary Accounts Committee in Parliament questioned why
>> the
>>> Government, presumably through the Info. and Comm. and other
>>> related dockets was jeopardising our national security by
>> selling
>>> shares in the telecoms sector to foreigners.
>>> http://www.nation.co.ke/News/politics/-/1064/478582/-/ywrqttz/-
>>> /index.html
>>>
>>> Dr. Khalwale was obviously not aware of PS Ndemo's latest and
>>> seemingly hurried initiative to abolish local shareholding
>>> requirements in the ICT sector and it should no doubt be brought
>> to
>>> Parliament's attention and the public's notice.
>>> http://africa.reuters.com/business/news/usnJOE4950WH.html
>>>
>>> It is time PS Ndemo presented himself in his official capacity
>> to
>>> Kenyans before the Parliamentary committee and named the foreign
>>> companies that have threatened not to invest in Kenya because
>> they
>>> cannot allegedly partner with Kenyans! Kenyans should never
>> condone
>>> blackmail, let alone from foreigners whose sole goal is to make
>> hay
>>> while the sun shines from Kenyans without engaging in knowledge
>> and
>>> technology transfer, indigenous wealth creation and other
>> derived
>>> benefits that newly industrialised countries (China, India etc)
>>> have reaped from enforcing local ownership requirements.
>>>
>>> It is time such critical decisions that affect the nation were
>>> taken out of the hands of individuals who through possibly
>> coerced
>>> strokes of pens to gazettements seriously compromise the
>> nation's
>>> march to progression in indigenous ownership of sectors of the
>>> economy. Such critical decisions should belong in the hands of
>>> Wananchi through Parliamentarians who should debate and ratify
>> such
>>> critical and arbitrary gazettements.
>>>
>>> Recently we saw the results of ill advised policies that favour
>>> foreigners at the expense of indigenous Kenyans. We saw
>> Safaricom's
>>> share price become thoroughly depressed by foreigners who were
>> in a
>>> rush to dump the shares. The greatest sufferers were local
>>> investors many of whom were already short changed with their
>> paltry
>>> 21 percent share allocation. Yet the powers that be, sought to
>>> favour foreigners who have no allegiance to the nation at the
>>> expense of Wananchi.
>>>
>>> What has PS Ndemo done to improve and increase local ownership
>> in
>>> the ICT sector before concluding that such efforts and
>> approaches
>>> were futile and that Kenyans were useless investors? If Ndemo
>> truly
>>> had the interests of Kenyans at heart he wouldn't be putting
>>> foreigners ahead of Kenyans! Similarly why has Ndemo been
>> appending
>>> his signature to documents that favour Libyans amongst other
>>> foreigners that undermine Wananchi while holding a public office
>>> that demands maintaining public trust and protecting public
>>> interest?
>>> http://www.eastandard.net/InsidePage.php?id=1143990641&cid=4
>>>
>>> The Law regarding Acting on behalf of foreigners interests:
>>>
>> http://www.kenyalaw.org/kenyalaw/klr_app/view_content.php?ContentHi
>> s
>>> toryID=12838
>>>
>>> Why is PS Ndemo purporting to fix what is not broken? Kenya
>>> recorded a 1330% increase in FDI in 2007, perhaps PS Ndemo could
>> be
>>> excused for the oversight at the time of his arbitrary
>>> pronouncement. Surely something must be working right..
>>>
>>>   http://africa.reuters.com/country/TZ/news/usnLO172755.html
>>>   The report showed that FDI to Kenya rose to $728 million in
>>>   2007 compared with $51 million in the previous year, a rise
>>>   of close to 1,330 percent. "Kenya's FDI increased due to
>>>   large privatisation sales in the telecommunications industry
>>>   and investment in railways," Naiko said.
>>>
>>> The Econet sham has been misused repeatedly by PS Ndemo as the
>>> reason for his rationale in first reducing local shareholding
>>> requirements from 30%, down to 20% and now to his envisioned
>> ZERO%.
>>> Instead of looking at the root cause of the matter which are
>>> unfavorable policies towards local investors, a hostile lending
>>> environment towards startups, poor vetting, poor tendering
>>> procedures, poor due diligence and irregularities by the
>> regulator
>>> and reforming those, he appears keen to lambast and blame
>> anything
>>> and everything else on Wananchi rather than address the root
>> causes
>>> by instituting and promoting professional changes and
>> improvements
>>> in the afflicted public institutions. Indeed how did bankrupt
>> KNFC
>>> and Econet meet the US$100m threshhold of turnover for tendering
>>> when Deloitte and Touche audited accounts show Econet's largest
>>> operation (before they were bundled out of Nigeria for not
>> having
>>> paid for their shares) having a turnover then of a mere US$8
>>> million and KNFC's total assets valued at Ksh 20million as of
>> 2006?
>>> The poor financials and the exercise of due care in conducting
>> due
>>> diligence by the regulator are the reasons why the licence fee
>>> could not be paid to the GK within the proscribed period and it
>> has
>>> nothing to do with the vast majority of local investors whom
>> Ndemo
>>> is trying to vilify. PS Ndemo and Treasury should let the public
>>> know if Econet has forfeited and paid in full its US$1.3 million
>>> bid bond to the exchequer for failure to pay the licence fees in
>>> cash as required:
>>>
>>> Audited Financials:
>>> http://rapidshare.com/files/152242139/Financials.pdf
>>> Miscellaneous:
>>> http://rapidshare.com/files/152242138/NjiriSA.pdf
>>> http://rapidshare.com/files/152242137/EconetSA.pdf
>>>
>>> For all we know PS Ndemo could have been misled by vested and
>>> powerful interests in the matter. Naturally the principles of
>>> justice dictate that he ought to be given the accordance of the
>>> benefit of doubt but if his deliberate actions show otherwise
>> then
>>> the wheels of justice must run their course. If it takes 14
>> years
>>> as it did for the eventual trial and judgement of Oluga and
>> Somaia
>>> for fraud against the Republic, then so be it.
>>>
>>> This is why if Ndemo is indeed innocent, he should not hesitate
>> to
>>> speedily request KACC, the CID, Kenya's numerous independent
>> anti-
>>> corruption organisations, any willing international partners
>> with
>>> forensic investigation capacities, members of the public to work
>>> towards investigating the matter. It is also important that the
>> PS'
>>> accomplishments on behalf of the nation are not blighted by a
>> few
>>> but serious malfeasances if he was indeed misled. PS Ndemo's
>>> involvement in the matter is a serious issue considering what
>> the
>>> law states about deliberately subverting directives and rulings
>>> such as the Minister's cancellation of the licence, given that
>>> deliberate ignorance of court rulings and Ministerial
>> cancellations
>>> is classified under law as fraud.
>>>
>>> The law as regards Misleading the public:
>>>
>> http://www.kenyalaw.org/kenyalaw/klr_app/view_content.php?ContentHi
>> s
>>> toryID=12843
>>>
>>> Section 354 of Chapter XXXV (Miscellaneous Offences Against
>> Public
>>> Authority) of the Laws of Kenya:
>>>
>>>     “ANY PERSON WHO KNOWINGLY UTTERS AS AND FOR A SUBSISTING
>>>     AND EFFECTUAL DOCUMENT ANY DOCUMENT WHICH HAS BY ANY
>>>     LAWFUL AUTHORITY BEEN ORDERED TO BE REVOKED, CANCELLED
>>>     OR SUSPENDED, or the operation of which has ceased by
>>>     effluxion of time, or by death, or by the happening of
>>>     any other event, is guilty of an offence of the same
>>>     kind, and IS LIABLE TO THE SAME PUNISHMENT, AS IF HE HAD
>>>     FORGED THE DOCUMENT,”
>>>
>> http://www.kenyalaw.org/kenyalaw/klr_app/view_content.php?ContentHi
>> s
>>> toryID=9961
>>>
>>> Amos Wako as the AG should let Kenyans know whether he was
>>> consulted by PS Ndemo, what his legal opinion was if any, by
>>> releasing the relevant correspondence, and if so, what rationale
>> he
>>> employed in purporting to settle a case the Government had
>> already
>>> won through a final court ruling!
>>>
>>> Judge's final Ruling upholding cancellation of licence:
>>> http://rapidshare.com/files/152242136/Econet_v_Minister.pdf
>>>
>>> video of PS Ndemo personally signing the sham "settlement
>>> agreement":
>>>
>> http://rapidshare.com/files/152229210/en_bs_250707_econectknfc.mp4
>>>
>>> Laws of Kenya regarding the Giving of advice:
>>>
>> http://www.kenyalaw.org/kenyalaw/klr_app/view_content.php?ContentHi
>> s
>>> toryID=12842
>>>
>>> AG Wako has shown previously that in matters where the
>> Government
>>> will ultimately prevail, the Government will not hesitate to
>> uphold
>>> the public interest even where the outcome could embarrass the
>>> executive as was the unprecedented case of Kenya Duty Free v GK
>>> where the Government's winning defence was that the former
>>> President had taken a US$2 million bribe from the applicant.
>>>
>> http://www.freshfields.com/news/mediareleases/mediarelease.asp?id=1
>> 0
>>> 19
>>>
>>> It is an inescapable fact that PS Ndemo seems to wish away that
>> the
>>> Econet licence was Scandal number 10 in Edward Clay's list of 20
>>> scandals committed against the nation:
>>> http://rapidshare.com/files/152246719/20Scandals.pdf
>>>
>>> What happened to Ndemo's rather reasonable previous requirement
>> in
>>> 2007 about local ownership, did vested foreign and "local -
>>> Mobitelea like" interests twist his arm and coerce him to change
>>> his mind??
>>>
>>>   What we are saying is that a foreign investor needs time to
>>>   (get to) know whom he can work with," Ndemo says. "In three
>>>   years he can do a private placement or in five years do an
>>>   IPO (initial public offering) or introduce employee option
>>>   plans, but they must give 30 per cent to locals."
>>>
>>> The issues are very simple, Ndemo should come clean and cease
>>> condoning and abetting the commission of illegal acts against
>> the
>>> public trust and interest that involve a permanently CANCELLED
>> and
>>> thus null and void license; open the matter to public scrutiny
>> and
>>> investigation and mostly importantly it is his duty as a Kenyan
>> to
>>> find constructive ways of promoting indigenous Kenyan ownership
>>> instead of working day and night to find ways to increase
>> ownership
>>> by foreigners at the expense of Wananchi. It is indeed absurd
>> that
>>> when Mama Mboga attempts to make a living without having a valid
>>> licence, she will certainly face the wrath of askaris, how
>>> foreigners can blantantly walk into Kenya, disenfranchise their
>>> local component with blessings from vested interests and when
>> their
>>> licence is cancelled continue to operate without a valid licence
>>> and without a new tender being called reeks of impunity at best.
>>>
>>> When 48 members of Parliament in 2003 rose up to be counted,
>> they
>>> surely knew what the animal they were pointing out, the same
>> animal
>>> that now disrespects Kenyan institutions as it continues to run
>>> around while flashing a long cancelled and now null and void
>>> licence as part of a grand and colossal fraud.
>>> http://www.telegeography.com/cu/article.php?article_id=2030
>>>
>>> Peterson Olale
>>>
>>> On Thu, 09 Oct 2008 15:59:44 +0000 John Maina
>> <j.maina at ymail.com>
>>> wrote:
>>>> Brian
>>>>
>>>> We dont dispute that.
>>>>
>>>> We are asking about the fact that the government is ignoring
>> court
>>>> injuctions which were shown there
>>>>
>>>> Why ignore court cases?
>>>>
>>>> JM
>>>>
>>>> ----- Original Message ----
>>>> From: Gakuru Alex <alexgakuru.lists at gmail.com>
>>>> To: j.maina at ymail.com
>>>> Cc: kictanet at lists.kictanet.or.ke
>>>> Sent: Thursday, October 9, 2008 4:54:50 PM
>>>> Subject: Re: [kictanet] Econet Haters.... :-D
>>>>
>>>> Brian,
>>>>
>>>> As kictanet chairman with all the 'forum powers',  I honestly
>> feel
>>>> that it is unfair for you to drag on this conversation at least
>>>> from a
>>>> "fair play" perspective....
>>>>
>>>> If you choose not to kill the thread, at least you should avoid
>>>> being
>>>> a discussant?
>>>>
>>>> regards,
>>>>
>>>> Alex
>>>>
>>>
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>>
>> Eric M.K Osiakwan
>> ICT Integrator
>> Internet Research
>> www.internetresearch.com.gh
>> emko at internetresearch.com.gh
>> 42 Ring Road Central, Accra-North
>> Tel: +233.21.258800 ext 2031
>> Fax: +233.21.258811
>> Cell: +233.24.4386792
>
> --
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>

Eric M.K Osiakwan
ICT Integrator
Internet Research
www.internetresearch.com.gh
emko at internetresearch.com.gh
42 Ring Road Central, Accra-North
Tel: +233.21.258800 ext 2031
Fax: +233.21.258811
Cell: +233.24.4386792



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