Lucy, I would hope that this were the case, it is unfortunate that the government has become deeply mired in this murky scandal that threatens to tarnish Kenya as a destination for reputable international telecoms companies hoping to invest. The fact that major international telecoms companies pulled out of the second national operator tender without submitting as much as a bid underscored the fact that telecoms giants have lost confidence in the fairness and transparency of the process following the handling of the 3rd mobile tender and the tampering of the initial second national operator where financial bids were changed in an attempt to deprive the government and the people of revenue. The Minister's decision to cancel these two tenders was correct and the right thing to do, but the continued engagement in failing to cancel the 3rd mobile tender despite the Minister's instructions put paid to any credibility the regulator had. The result of non participation by experienced and reputable companies with healthy balance sheets is what we saw in the second national operator tender where non payment was the cause of the failure of the tender. The government is duty bound to uphold the law and this includes applying the law fairly and without impartiality. Aiding in the disenfranchisement of Kenyan shareholders from a company at the behest of a foreign entity that is in the first place a stranger to the licence crosses that line of impartiality and implicates the government as complicit in Econet's actions and thus opens the government to legal and financial liabilities. Perhaps KNFC will be oppressed and dissuaded from taking legal action against the state to preserve their rights, after all they are Kenyans and not favoured foreigners. As for the media, don't count on them telling the truth, journalistic ethics and responsibilities evaporated the minute unscrupulous colleagues adopted paymasters other than their employers thus tarnishing the profession. On 7/28/07, Lucy Kimani <[email protected] > wrote:
Mike,
One would hope that our hard-working team at the Ministry dont get mired in the Econet charade, and will do their homework to make sure that Kenyan
Farmers dont get short-changed like the Nigerians, although they did learn
their lesson and took corrective measures thereafter.
Alex, fancy taking up the role of the "people's watchdog" since the media has clearly been compromised on this one! CNN has Anderson Cooper keeping
the Government honest, so I hope you can step in!
LK
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 <[email protected]> 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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