Like other Kenyans, I am proud of our country's cooperative movement, which is a shining example around the world. And I am proud of the Cooperative Bank of Kenya (CBK), a state institution which had its IPO only last December. Before the IPO, only cooperative societies had a real chance of buying CBK shares in bulk. For retail investors, there was one over-the-counter route to obtaining CBK shares, for a good number of years. This was what is now Suntra Investment Bank, which is presently weakened by scandal of huge proportions.
I have just had a look at CBK's Annual Report and Accounts for 2008, which has just been released. I am talking in particular of pages 144 to 146, which, thanks to an aspect of Kenya's corporate law, obliges the bank and other publicly quoted companies to show the distribution of shares among the bank's top 10 shareholders, the bank's own Directors, and different categories of the bank's shareholders. If you peruse those pages too, you will, as I do, smell a rat that stinks to high heaven.
CBK has a total of 3,492,369,900 issued shares, and a total of 116,068 shareholders. That averages at 30,088 shares per shareholder, regardless of category. More importantly, Kenyan individual shareholders own 939,112,300 shares, and there are 112,774 of them. This averages at only 8,327 shares per Kenyan individual shareholder. Alas, among CBK'S seventeen Directors (who own a total of 138,995,700 shares), the average is a staggering 8,176,217 shares (that's more than 981 times the number owned by the average Kenyan investor).
In fact, if you compute the average for Kenyan individual investors without including the shares held by the Directors: the total number of shares held by Kenyan individuals (non-directors) drops to 800,116,600 shares, and the average among the 112,757 of them drops to 7,095 shares per individual (which is 1,152 times less than the average for the Directors).
We can look at the directors' allocations to themselves in even starker light, as follows:
1. The Managing Director owned, as at the end of December 2008, a total of 68,121,000 shares.
2. The Chairman of the Board owned 8,000,000 shares
3.The Vice Chairman owned 7,700,000 shares
4. The Company Secretary owned 5,090,000 shares
5. The Commissioner of Cooperatives owned 2,750,000 shares
6. Five other Directors also owned just over 5 million shares each
7. Three other Directors owned exactly 5,000,000 shares each
8. One Director owned 2,750,000 shares
9. One Director owned 2,310,000 shares, and another owned 2,300,000 shares
10. The "poorest Director", representing the Permanent Secretary at the Ministry of Finance, owned what you may call a "token" of 1,000,000 shares! [Currently each share sells at around KES 6.50, or US$0.083]
The circumstances under which these stupendous amounts were allocated and paid for require a forensic investigation. The Directors should step aside while this happens, for, clearly, there has been no transparency here. Previous annual reports of the company may suggest where these shares came from over the years. For at least a couple of years after the bomb blast, annual reports showed significant amounts of issued shares, without explanation as to who was receiving them. The public has reason to need to know now. At the SACCOs, and at the bank's registry, officials did not seem to ever know that additional shares were being made available each year for purchase by members. What Suntra did over the counter, as far as one knew, was to match retail buyers and retail sellers who had owned their shares for some time, perhaps even since before the bomb blast, which nearly reduced the bank to a rubble, in August 1998.
The shares previously held by individual cooperative societies, amounting to 64.56% of the total, were (wisely in my view) grouped together, just before the IPO, under a corporate entity called Co-opholdings Co-operative Society Ltd. This ensured, and still does, control of the bank by the country's cooperative movement. However, the then acting Minister for Finance, John Michuki, issued a strange edict prior to the IPO which keeps secret for some five years or so the identities of the societies (and perhaps other "entities") brought together under that corporate entity. Let us hope that there are not even more rats under cover there. Five years may be too long to find out the truth!
Showing posts with label Bomb Blast. Show all posts
Showing posts with label Bomb Blast. Show all posts
Friday, May 29, 2009
Thursday, August 07, 2008
Bomb Blast of August 7, 1998: Tenth Anniversary
Today, Thursday, marks the tenth anniversary of the August 7th, 1998 bomb blast in Nairobi, and almost simultaneously in Dar-Es-Salaam. The Nairobi blast killed some 245 people, and injured and maimed some 5,000 more. As far as I cat tell, indeed, it was the single largest international terrorist attack in history, before 9/11.
I was on the third floor of Gandhi Wing, at the University of Nairobi, when the blast occurred at around 10.30 that Friday morning. It was so loud it couldn't have occurred much farther away than Lillian's, just across University Way, or so I thought in that instant. But it was also muted enough that, it did not necessarily sound like a bomb. In fact, my first thought had been that a very badly maintained bus, or some other vehicle, had grossly back-fired!
Soon enough, however, it became clear, as we went up and down Gandhi Wing, that the incident was farther away. As we gathered in small groups, we began to see smoke rising somewhere else, across town. At first we thought that the incident had occurred in the general direction of the industrial area, and then maybe the railway station, and then maybe somewhere in the vicinity of the station, or even NHC building. In hindsight, we were, unwittingly, skirting the issue -- the "epicentre."
From where we stood, we could see a scattering of rather agitated people running away from, and in the general direction, of the billowing smoke. Then we began to see pieces of paper everywhere in the smoky sky, over Moi Avenue and slightly to the east of it; and it seemed that some force kept releasing more and more paper into the sky. Clearly, some office had suffered a catasprophic blast, accompanied by fire. [Some of that paper eventually landed on the roof of Gandhi Wing; and when we went there to check, we found a slightly burnt photocopy of someone's national ID card and some other paper].
Before long, the quickly evolving story began to acquire clarity through word-of-mouth and such telephone calls as could yield concrete answers. That was before TV news kicked in with the facts, as could immediately be reported -- and it did not take long to do that. We heard of Ufundi Coop Building (which housed a teachers' SACCO) and Co-operative Bank House. We heard that the Minister of Education, Mr. Joseph Kamotho -- who was at that time engrossed (as I recall) in a tussle with the teachers' union -- was caught up in the blast.
This piece of news caused conspiracy theories to fly, including the one about the government of President Moi somehow having a hand in the blast -- with Kamotho as the target. What saved the day for Moi, and the nation, was the news which arrived very quickly out of Dar Es Salaam that there had been an explosion there as well. It would have been very difficult, otherwise, to exonerate Moi -- as the political atmosphere was quite charged at the time, as I recall.
The two explosions were quickly seen, then, as a coordinated terrorist act targeting US embassies in the two capitals. For a while, thereafter, we expected to get similar news from Kampala, but it never came. I think thast the realization that the country had been attacked by external forces helped to calm down the country, and to draw it closer. We were able to share in the grief of August 7th as one nation.
I did not visit "the site" of the blast that Friday, for it just did not seem to me the thing to do. Instead, I drove home at lunch time, having decided to defer my visit to the site, such as it could be, to Saturday. I did go on Saturday, and there were many Kenyan onlookers on that day -- as there were going to be for many of the days that followed. Police had cordoned off much of the blast area, as there was active search and rescue activity going on (including the matter of saving Rose). I would not, in fact, get the opportunity to stand at the base of the severely ripped-off Coop Bank Building, until three months or so later. And when I did, the enormity of what had happened at that place really sank in, even as I stood there those many days after the event.
That same weekend of the blast, I drafted a memo to my Vice Chancellor proposing a course in Disaster Management. Never got a reply. In the week that followed, I began to sell the idea of the course to my colleagues in the Department of Sociology, and to look into expanded possibilities. Soon enough, the idea of a course evolved into an entire Masters programme in Disaster Management -- and into a comprehensive Module II MA programme in the Department. From my base in the Department, I was quickly thrust into the Faculty's Curriculum Development and Income Generation Committees, where I spearheaded the crafting of what became the Faculty's Module II Programme. I was elected Dean of the Faculty of Arts at the end of 1998, but that's another story.
What I would like to emphasize here, as I conclude, is that the bomb blast of August 7th, tragic as it was, became the catalyst, in a very direct way, for the graduate programme in Disaster Management at the University of Nairobi. I can make that claim without any fear of contradiction. But it was also probably the main reason (a) I became Dean, and (b) the Faculty's Module II programme (from undergraduate to postgraduate) took off when, and with the singlemindedness, it did.
I was on the third floor of Gandhi Wing, at the University of Nairobi, when the blast occurred at around 10.30 that Friday morning. It was so loud it couldn't have occurred much farther away than Lillian's, just across University Way, or so I thought in that instant. But it was also muted enough that, it did not necessarily sound like a bomb. In fact, my first thought had been that a very badly maintained bus, or some other vehicle, had grossly back-fired!
Soon enough, however, it became clear, as we went up and down Gandhi Wing, that the incident was farther away. As we gathered in small groups, we began to see smoke rising somewhere else, across town. At first we thought that the incident had occurred in the general direction of the industrial area, and then maybe the railway station, and then maybe somewhere in the vicinity of the station, or even NHC building. In hindsight, we were, unwittingly, skirting the issue -- the "epicentre."
From where we stood, we could see a scattering of rather agitated people running away from, and in the general direction, of the billowing smoke. Then we began to see pieces of paper everywhere in the smoky sky, over Moi Avenue and slightly to the east of it; and it seemed that some force kept releasing more and more paper into the sky. Clearly, some office had suffered a catasprophic blast, accompanied by fire. [Some of that paper eventually landed on the roof of Gandhi Wing; and when we went there to check, we found a slightly burnt photocopy of someone's national ID card and some other paper].
Before long, the quickly evolving story began to acquire clarity through word-of-mouth and such telephone calls as could yield concrete answers. That was before TV news kicked in with the facts, as could immediately be reported -- and it did not take long to do that. We heard of Ufundi Coop Building (which housed a teachers' SACCO) and Co-operative Bank House. We heard that the Minister of Education, Mr. Joseph Kamotho -- who was at that time engrossed (as I recall) in a tussle with the teachers' union -- was caught up in the blast.
This piece of news caused conspiracy theories to fly, including the one about the government of President Moi somehow having a hand in the blast -- with Kamotho as the target. What saved the day for Moi, and the nation, was the news which arrived very quickly out of Dar Es Salaam that there had been an explosion there as well. It would have been very difficult, otherwise, to exonerate Moi -- as the political atmosphere was quite charged at the time, as I recall.
The two explosions were quickly seen, then, as a coordinated terrorist act targeting US embassies in the two capitals. For a while, thereafter, we expected to get similar news from Kampala, but it never came. I think thast the realization that the country had been attacked by external forces helped to calm down the country, and to draw it closer. We were able to share in the grief of August 7th as one nation.
I did not visit "the site" of the blast that Friday, for it just did not seem to me the thing to do. Instead, I drove home at lunch time, having decided to defer my visit to the site, such as it could be, to Saturday. I did go on Saturday, and there were many Kenyan onlookers on that day -- as there were going to be for many of the days that followed. Police had cordoned off much of the blast area, as there was active search and rescue activity going on (including the matter of saving Rose). I would not, in fact, get the opportunity to stand at the base of the severely ripped-off Coop Bank Building, until three months or so later. And when I did, the enormity of what had happened at that place really sank in, even as I stood there those many days after the event.
That same weekend of the blast, I drafted a memo to my Vice Chancellor proposing a course in Disaster Management. Never got a reply. In the week that followed, I began to sell the idea of the course to my colleagues in the Department of Sociology, and to look into expanded possibilities. Soon enough, the idea of a course evolved into an entire Masters programme in Disaster Management -- and into a comprehensive Module II MA programme in the Department. From my base in the Department, I was quickly thrust into the Faculty's Curriculum Development and Income Generation Committees, where I spearheaded the crafting of what became the Faculty's Module II Programme. I was elected Dean of the Faculty of Arts at the end of 1998, but that's another story.
What I would like to emphasize here, as I conclude, is that the bomb blast of August 7th, tragic as it was, became the catalyst, in a very direct way, for the graduate programme in Disaster Management at the University of Nairobi. I can make that claim without any fear of contradiction. But it was also probably the main reason (a) I became Dean, and (b) the Faculty's Module II programme (from undergraduate to postgraduate) took off when, and with the singlemindedness, it did.
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