The explosive Parliamentary Committee Report on Public Investments demands that the Director of Kenya Anti-Corruption Commission immediately institute investigations on the circumstances and manner in which the shares were transferred to Mobitelea with a view to taking appropriate action against any persons found responsible. The PIC also desires that the Director of KACC include a progress report on the investigation in the commission's quarterly report to the House for the next immediate period.

Also in the report are the following recommendations;

the Green man

In this, its 15th report, the PIC has dealt a blow to the eagerly anticipated Safaricom IPO. The enigma here is Mobitelea Ventures which was registered in Guernsey on 18^th June 1999. The real owners are hidden behind 2 nominee firms Mercator Nominees Ltd and Mercator Trustees Ltd also registered in Guernsey. The directors are named as Anson Ltd and Cabot Ltd based in Anguilla and Antigua. The Chief Executive of Safaricom Ltd, Mr. Michael Joseph told the PIC that he was unable to disclose to the Committee who the direct and indirect shareholders of Safaricom were.

The PIC in its report noted with concern that:

1. There were grievous discrepancies on the date provided by the various persons on the time of reduction of TKL shareholding at Safaricom from 70% to 60%.

2. None of the witnesses before the Committee could ascertain whether Vodafone PLC actually wrote to TKL asking for increase in their shareholding in Safaricom.

3. The Management of TKL was unable to justify the need to reduce TKL shareholding from 70% to 60%.

4. The Management of TKL could not confirm whether TKL was paid anything in return for the 10% shareholding irregularly ceded to Vodafone PLC.

bitter option?

5. The Shareholder Agreement was first signed between Vodafone PLC and KP&TC on January 25, 1999 when policy on investments required Kenyan ownership be not less than 70%. The policy was later amended to accommodate M/S Mobitelea Ventures.

6. The information provided by Mr. Gavin Darby that "M/s Mobitelea Ventures was identified as a local partner of Vodafone Group for the advisory role it played on local business practices and protocol challenge associated with investigating in Kenya" was misrepresentation of the truth since Mobitelea Ventures is ostensibly not based nor does it operate in Kenya.

7. The Shareholder Agreement was signed on January 25^th 1999 long before Vodafone PLC came by Mobitelea Ventures Ltd.

8. No one else was able to ascertain the existence of the "competitive" process through which Vodafone PLC bought back 5% of Safaricom shares from Mobitelea Ventures as alluded by Darby (Vodafone PLC) through his letter to the PIC.

9. Vodafone PLC failed to appear before the Committee despite several requests to Messers Rhys Philip and Gavin Darby.

10. Mr. Michael Joseph, Chief Executive of Safaricom Ltd, tabled a letter dated 26^th May 2000 before the Committee, ostensibly from VKL forwarding a bankers draft of US$ 22 million. The letter was found to be fictitious as it purported that the postal address of VKL was P.O. Box 40034-00100 Nairobi. In the year 2000 Kenya had not effected the postal coding 00100.

11. The 7^th final Board of Directors meeting held on 27^th September 1999 abetted the outright theft of public shares in Safaricom.

12. The meeting of Board of directors of Safaricom on 5^th October 1999 was not properly constituted, as only the Chief Executive and the Company Secretary of KP&TC were present.

13. Safaricom Ltd is a Capital Investment by TKL. Any divestiture ought to be sanctioned by the parent Ministry and the Treasury. There was neither such request sought nor approval given.

14. Agreements entered between Vodafone (K) Ltd and Telkom (K) Ltd on Safaricom and those between the latter and the two shareholders were not authenticated by way of company seals. Some amendments made on the agreements were actually handwritten and may not have force of law.

Safaricom boss, Joseph

15. TKL failed to invoke clause 12.3 (a) (Right of the first refusal) of the original cooperation and shareholders agreement. TKL and Safaricom management alluded not to know the nature of transactions between Vodafone PLC and Mobitelea Ventures.

16. It is appalling that Vodafone PLC a UK company involved itself in underhand activities of corrupt nature aimed at depriving Kenyan citizens of billions of shillings through M/S Mobitelea Ventures despite the fact that UK has been in the forefront of campaigning against corruption in developing countries.

The Parliamentary Investments Committee in its report held that "there appears to have been a conspiracy by some officers of Government, Mobitelea Ventures, Vodafone Plc and Telkom board to defraud the public of its shares in Safaricom. Neither the Management of Safaricom nor that of Telkom could produce the written request by Vodafone asking for increase in Vodafone's' shares from 30% to 40%. This supposition is further affirmed by the inexplicable disappearance of the records of Vodafone (K) from the Registry of Companies".

Full report