No End in Sight to Refunds Blame Game in Kenya

Mergers, Acquisitions and Financial Results

The blame game on who and what is causing the delay in issuing refund cheques for the Safaricom IPO is in full swing.

So far, the need to authenticate the identity of claimants for the refund cheques is being cited as the cause. Authorised selling agents are saying that the process is tedious, as concrete proof has to be shown. "We have to ascertain that the cheque goes to the rightful owner and not to proxies or frauds. It is a long process but we have to do it to be sure," said Peterson Mwangi, chief executive of Afrika Investment Bank.

Mwangi also pointed out that the queues were inevitable due to the large numbers of investors seeking the cheques. The share offer attracted over 800,000 investors with a majority falling under the local retail investors. "The problem is that all these people want their refund cheques issued on the same day to them. This results to the queues that are being witnessed," noted Mr Mwangi.

The agents who have the duty of issuing the cheques are denying allegations by the Central Bank that they are sitting on the cheques. On Tuesday, the bank raised an alarm over the sluggish progress by the stockbrokers in releasing the cheques. "We have noted the growing public concern on delays in getting back Safaricom IPO refunds," said CBK governor Njuguna Ndungu.

According to the governor, all refund cheques were delivered to the Authorised Selling Agents offices by 8.00 am on Monday June 9.

However Mwangi noted that the money was not in the custody of the agents but with Citi Bank thereby rendering the CBK claim as baseless. "Our role is only to issue the cheques sent to us by Citi which was the receiving bank, we do not have the money in our possession as is being claimed," said Mr Mwangi.

Another official from Faida Securities who declined to be named said that Citi's issuing of individual cheques to investors has complicated the process. "We paid for the allocation in one installment, we were given over 50,000 cheques to issue and this cannot all be released at once," noted the official who preferred anonymity.

A notice issued by the Capital Markets Authority two weeks ago, indicated that refund cheques for the offer were supposed to be released beginning June 9. However, only a few outlets had by close of business on the said date started this process.

"I came here on Monday and after spending hours on the queue I was issued with a cheque number and told to come back today. Here I am and it is not certain that the cheque will be issued to me," an investor told the Nation at CFC Financial situated at the International Life House.

The Nation