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

[mwananchi at hushmail.com]

Dear Dr. Ndemo, 

Thank you for taking the time to respond to the issues at hand. The 
tone of the Kictanet debate might have appeared antagonistic and 
even degenerated to extreme lows at some points, but rest assured 
that these are not issues of a personal nature as some have 
cheekily tried to paint them. The issues at hand revolve around 
official acts and policies.

We simply as I indicated in a separate message want the Government 
to do the right thing and that is to uphold the law and do what is 
best for Kenyans. 

We do and must detest xenophobia, but far from that, foreigners are 
welcome as long as there are beneficial conditions for Kenyans 
attached to their entry into key sectors that promote and enhance 
Kenya's technological capacities, create indigenous wealth (not 
just employment), and help propel Kenya to achieving new grounds 
and heights of indigenous accomplishment. Take the case of India, 
Tata is now an international conglomerate, more so in the area of 
motor vehicle manufacturing as a result of the Indian government's 
requirements for joint ventures which demand significant local 
ownership and benefits for other local industries. Another example 
are tenders held by the Indian Government which require up to as 
much as 50-50 participation, despite such steep local equity 
requirements, there are multinational companies clambering over one 
another for such opportunities.
http://www.mobilepundit.com/2005/12/05/zte-beats-huawei-for-bsnl-
tie-up/

Taking up the case of the briefcase businessmen. Isn't this a 
failure of our institutions more so the regulator in conducting 
proper due diligence? The failure to do this is the key issue which 
is being used to give local businessmen a bad name, if proper due 
diligence had been properly conducted the consortia not meeting the 
bar should never have been allowed to bid in the first place. 
Instead due to a lack of diligence we let in unscrupulous parties 
who want to reap where they have no sowed. The "multinationals" are 
not so innocent either, we have seen a classic example of 
international investors fail to repeatedly pay their licence fees 
for over 4 years while conveniently blaming it on local investors. 

We can agree on the fact that there are serious Kenyan investors in 
the ICT sector. As noted above, the way to eliminate extortionists 
is to conduct proper due diligence and prosecute parties for 
economic crimes that involve a failure to conduct due diligence. If 
extortionists persist, they should also be prosecuted under the 
existing economic crimes statutes as the law provides regarding 
delivery of revenue due to the Government. If there are no 
consequences, the problems will likely continue.

I beg to differ on Safaricom as this was attributed to foreign 
investors dumping Safaricom Shares leading to the depression of the 
share price. Below is the article as published in the Business 
Daily. I did not purport to be an economist rather just pointed out 
what NSE insiders were stating:
http://www.bdafrica.com/index.php?option=com_content&task=view&id=88
47&Itemid=5812

As I mentioned earlier, FDI inflows indeed improved tremendously 
but it seems as though the policy changes are trying to fix 
something that may not be broken. Certainly FDI inflows should be 
improved as one of the Government's goals, but why not try to 
create policies that promote local ownership and beneficial joint 
ventures?

Regards, 

Peterson

On Fri, 10 Oct 2008 04:20:13 +0000 bitange at jambo.co.ke wrote:
>Dear Mr. Olale,
>I have carefully read your contribution but I do not see any point 
>you
>raise to support Kenyanization of ICT development.  Let us not 
>confuse
>xenophobia with nationalism.  As I stated earlier, we must learn 
>from the
>past to shape our future.  A lot of the so called local Investors 
>are
>briefcase businessmen often specialized in extorting 
>multinationals at the
>expense of the majority Kenyans.  This is what we must fight.
>
>There are serious Kenyan investors in the ICT sector and we are 
>seeing
>these investments grow to the extent of merging with MNCs.  This 
>is a more
>sustainable rout to follow than licensing extortionists.  We care 
>for all
>Kenyan investors but we must also deal with bad apples.  The major 
>telkom
>companies are variously owned by Kenyans.
>
>It is absurd that you to attribute the drop of Safaricom share  
>price to
>foreigners yet a first year student of economics will tell you 
>that the
>trend worldwide is the same and even the most capitalist countries 
>are
>rushing to bail out troubled companies.  Secondly, too many people
>borrowed to finance the Safaricom share and hoped to cash-in 
>quickly –
>leading to excess supply of shares – that means price would drop 
>and in
>the long run will eventually stabilize and begin to rise.  My 
>brother one
>needs to understand this simple economics, before attempting to 
>become a
>labour economist.
>
>Please note that almost 90% of FDI last year to Kenya was in
>Telecommunications.  The more reason we should encourage more FDI 
>this
>year through policy change.
>
>
>Regards
>
>
>Ndemo.
>
>
>
>> 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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>>
>>
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