VODAFONE STAKE IN SAFARICOM IS INDIRECT
The complex web of Vodafone's involvement with Safaricom in Kenya has been revealed by a UK newspaper. The foreign firm's involvement in Safaricom is indirect through the shell company Mobitelea Ventures which was registered in the British Isles offshore island of Guernsey on June 18, 1999, the UK Guardian says.
This was several months after Vodafone struck a preliminary deal with the Government. But the identity of Mobitelea's owners remains shrouded in mystery and is hidden behind two nominee companies, Mercator Trustees and Mercator Nominees, both of which are also registered in Guernsey. The directors of both companies are named as Anson and Cabot Ltd, who are based in the West Indies - in Anguilla and Antigua.
In a recent letter to Kenya's parliamentary Public Investments Committee, Vodafone chief executive Gavin Darby said Mobitelea is Vodafone's chosen partner in Kenya. "When Vodafone makes investments in new territories, it is not uncommon that it works alongside a partner who typically gives advice on local business practices and protocol and the various challenges associated with investing in a new market," Mr Darby said
"Vodafone would prefer to be in a position to make a comprehensive disclosure but, having taken legal advice, it could be in breach of confidentiality were it to discuss Mobitelea further." The issue needs to be resolved as Safaricom is soon to be listed on the Nairobi Stock Exchange.
The PIC has launched an inquiry into the issue and asked Vodafone to attend a meeting in Nairobi on January 30. But the invitation was declined. PIC chairman Justin Muturi said he was concerned about Vodafone's lack of transparency over its dealings in Safaricom shares. The Guardian said that whoever is the owner of Mobitelea has made a tidy profit.
In return for its advice, the company was given $5 million (Sh360 million) in cash and a 5 per cent stake in a company that analysts value at $2 billion (Sh144 billion), the paper says. The investigation in Kenya also centres on why the Government allowed Vodafone to acquire 40 per cent of Safaricom instead of the 30 per cent limit that had been agreed upon.
The Guardian pointed out that without the concession, the Kenya government's current stake in Safaricom would be worth an additional $200 million (about Sh14 billion).