Mergers, Acquisitions and Financial Results

The mystery over the owners of the company deepened last week when Vodafone (UK) Ltd declined to reveal the local shareholders of Mobitelea, said to own a five per cent stake in Safaricom. However the UK-owned PLC revealed that the shares were held by a Channel Islands-owned company, a traditional route for shareholders seeking to remain anonymous.

The Clerk to the National Assembly, Samuel Ndindiri, last week presented to the Public Investments Committee (PIC) a letter written to him by Vodafone (UK) chief executive in charge of the Americas, Africa, China and India, Gavin Darby, explaining the shareholding structure of Safaricom and Vodafone (Kenya) Ltd.

In the letter, Vodafone recognised the existence of Mobitelea, which it described as its partner in Kenya when it sought to acquire Safaricom shares in 1999. Darby said Mobitelea, which owns 12.5 per cent shares in Vodafone (K) Ltd, was registered in Guernsey, an Island in the British Channel.

"Vodafone's chosen partner in Kenya was Mobitelea, a company resident in Guernsey," he said in the letter dated January 29, 2007. But he declined to give more details about the company, stating that doing so could be breaching confidentiality.

"Vodafone would prefer to be in a position to make a comprehensive disclosure but, having taken legal advice, could be in breach of a duty of confidentiality were it to discuss Mobitelea further," Mr Darby states in the letter.

Darby said Vodafone (K) Ltd acquired 40 per cent of Safaricom in 2000 by paying Sh1.4 billion ($20 million). It spent another Sh1.54 billion ($22 million) for its portion of the license fee of Sh3.85 billion ($55 million) while it was still wholly owned by its UK parent company. Two years later that it sold 25 per cent shareholding in Vodafone (K) to Mobitelea at a cost of Sh1.4 billion.

However, Vodafone (UK) bought back 12.5 per cent of Vodafone (K) in 2003 at an undisclosed figure from Mobitelea to increase its economic interest in Safaricom from 30 per cent to 35 per cent.

"As the owner of 12.5 per cent in Vodafone (K), Mobitelea is a financial investor only and has no seat on its board, no vote on operational or investment decisions of that company and no influence in any way over Safaricom," he stated.

The Nation