Re: [kictanet] [Skunkworks] It's a new twist for Econet Wireless
David, These are good questions, and several remain to be unravelled. There are many dimensions to this issue. One party clearly has a public relations scoop over the other as certain reporters who masquerade as 'correspondent' gleefully write about one entity in a one sided manner that borders on glorification. If KNFC's arguments are accurate, it begs the question of how a minority shareholder made a decision on behalf of an entire company without the knowledge of the other shareholders so as to 'withdraw' the case. I doubt that KNFC want to pocket the difference, just the other day none other than Vice President Awori promised to deliver the licence to KNFC/EWK on Ushirika day while addressing members of the Co-operative movement. This was reported in sections of the media (note the lop sided coverage) and KNFC was quoted as stating they were prepared to go it alone (per KT and Capital FM). You are right on the mark, it is imperative to use lawyers to avoid these types of controversies or where token board members (now former) of a company are compromised and terrorize an entire movement. KNFC were brought on board by a well meaning Kenyan who was then an executive at the foreign entity, he was apparently inspired by how Empowerment programs were working in South Africa. KNFC has the capacity to raise the capital. KNFC has been derailed several times by powerful outside forces who continuously meddle in its attempts to progress. This licence is fully capable of being wholly owned by Kenyans and Kenyans alone if need be through a combination of grass root equity through the cooperative movement, private equity,debt financing and a build, operate and transfer arrangement. What KNFC needs is an advisory firm with experience preferably with transactions in South Africa's empowerment models. As to the retention of the funds, it will be interesting to see how the Government handles this debacle. As it is, if the tender rules were to have been followed to the letter the licence ought to have been cancelled over 2 years ago according to the tender rules and the Kenya Communication Regulations. ======== Page 16, Section 4.5 of the Tender document: The pre-qualified mobile operators consortia shall not be allowed to change the character of their composition by either substituting any of the pre-qualified operators' consortia with a new member or by submitting separate bids. ========== Page 90 of the 3rd mobile Tender document regarding cancellation was also appropriately applied in the case of the Second National Operator in cancelling Vtel's bid where VTel was willing to pay but its local partners were not: (iii) if the Applicant, after having notified the Commission of its acceptance of the licence, fails to pay the licence fee fully within 60 (sixty) days after such notice; http://www.telegeography.com/cu/article.php?article_id=16405 The East African reported on November 1, 2004, the following: However, the licence was not awarded as the fee was not raised by the October 17 deadline. But neither did the Communication Commission of Kenya (CCK) invite fresh tenders or award the licence to the second highest bidder as required by the Kenya Communications Act. Instead, it decided to give the Kenya National Federation of Co-operatives another 30 days – beginning October 18 – to raise its share of the amount required. Econet has already paid its share of $15 million of the licence fee. ========= Perhaps VTEL should get a similar deal no matter how unorthodox and get a second shot at the licence now that the regulator has established a precedent?? Well that remains to be seen. Mike Theuri On 7/25/07, David Kiania | Asentric Consulting Ltd <kianiadee@gmail.com> 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 On 7/25/07, Mike Theuri <mike.theuri@gmail.com> wrote:
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@mediacorp.co.ke> 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
----------------------------------------- This email was sent using Communicatons Solutions LTD WebMail. " " http://www.accesskenya.com/
Noam Chomsky, "The Loneliness of Noam Chomsky" as written by Arundhati Roy, The Hindu, August 24, 2003 http://www.chomsky.info/onchomsky/20030824.htm. Governments are the same all over the world, ours no exception - BUT "Thinking Kenya" will continue haunt them. So many strange things are going on today one cannot help but wonder who will cure 3NS ("Nitatoka Na Nini Syndrome") that infects our "leaders". If you recall, I referred to Chomsky's Neoliberalism tribulations at http://www.chomsky.info/onchomsky/19990401.htm Local architects have got the media right where they wanted them - barricading themselves in fighting off storming, "cross-media" break-ups, Media "Regulation". Researchers dare not give "misleading" statistics to the "fighting for survival" besides "properly owned" media! Lucy, you ask of me a very difficult thing-"go to war without FOIA weapon" and I ask "Who will volunteer this just instrument to the good, hard working people?" Majority of these people hitherto struggled "to make ends meet", now I am not sure if they are clinging to the only end they've been holding on to. Their assets are being seized through the back doors. Turn to well paid KACA! NOP! I have my performance contact with my little biashara I have no time to give grounds for justification for the next pay rise of their Boss. "Who does Alex think he is?" influence peddlers ask on the corridors of the-powers-that-be. "We just wait for him to make one false move then fix him." they vow. (Perhaps it's only because professionalism has permeated many ranks otherwise, disappearing acts would be the order of the day.) So you see Lucy, I have to think about your question a little more before I respond. Right now, "Ask not what your country can do for you. Do it yourself," http://members.aye.net/~hippie/hippie/special_.htm 1."Access to computers should be unlimited and total." 2 "All information should be free." 3."Mistrust authority - promote decentralization." 4."You can create art and beauty on a computer." 5."Computers can change your life for the better." Thus meanwhile, I just sit back and use my computer and this incredibly powerful, enabling Internet technology! It's all I got ;-) Regards, Alex --- Lucy Kimani <lkimani@comnews.co.ke> wrote:
=== message truncated === ____________________________________________________________________________________ Building a website is a piece of cake. Yahoo! Small Business gives you all the tools to get online. http://smallbusiness.yahoo.com/webhosting
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 <lkimani@comnews.co.ke > wrote:
participants (4)
-
Alex Gakuru -
Bill Kagai -
Lucy Kimani -
Mike Theuri