13 July 2008
editorial
Nairobi — In recent times, the handling of public assets has become an emotive issue. It is less than a week since Finance minister Amos Kimunya quit under intense public pressure. At the time of his ignominious exit, the sale of the Grand Regency hotel was the focus of many of his alleged misdeeds.
But in between, the Safaricom IPO was slotted in to make the list of allegations sound substantial. According to politician Bonny Khalwale, Alcazar Capital Kenya acquired a sizeable chunk of the shares reserved for foreigners. We do not want to give any credence to these claims as long as there is no evidence.
However, the act of putting under scrutiny transactions involving public assets deserves some support. In our business pages today, we bring you the full list of investors in the Safaricom issue. But from the look of things, the list hardly tells you who all the disclosed investors are.
In particular, nearly half of the shares went to investment banker Morgan Stanley which was the joint lead arranger of the issue. The firm ran the foreign book besides ending up with most of the shares.
Presumably, they are warehousing the shares for some other investors. That would amount to having underwritten the issue.
In our opinion that was not the main reason Morgan Stanley and their local partner were invited by Treasury to do. They were supposed to convey the shares to the highest bidder.
We do not begrudge them the substantial amount of shares in their hands.
But it is in the public interest that they come out and say on whose behalf they are - or were if they have sold any - holding the shares. If it is on their own behalf, let them tell the Kenyan public who owned the shares before the sale.
Indeed, in view of the low allocations to individuals, one can hardly justify holding of the large chunk of shares by one foreign entity after they paid a premium of only 50 cents above the domestic pool price.
To fully understand how this happened, we need also to know how much they paid for this. Did all the bidders bid Sh5.50 or did some pay more?
Short of full disclosure, speculation over the foreign investors will not die down.
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