Kenya Insights

Category: Business

  • Safaricom Blocks Airtel-Telkom Merger Because Of Sh1.3 Billion Debt

    Safaricom Blocks Airtel-Telkom Merger Because Of Sh1.3 Billion Debt

    Kenya’s giant Telco Safaricom wants Airtel and Telkom Kenya to settle Ksh.1.3 billion debt ahead of the planned merger of operations by the two mobile service providers.

    Acting Safaricom Chief Executive Officer Michael Joseph stated through a statement to the media that the company is not opposed to the merger between Airtel and Telkom Kenya as it has been alleged before but raised three concerns among them the Ksh.1.3 billion debt the two companies owe the Telco giant.

    “While we are supportive of industry changes that seek to deliver greater choice and value to consumers, we have raised valid concerns that we hope the regulator will consider and address as part of the approval process. The first is the debt owed by the two operators, amounting to KES 1,297,448,468.88, incurred for the provision of various services including interconnection, co-location and fibre services. This debt is due and payable, based on the agreement to provide services entered into with the two entities as distinct operators,” reads the statement.

    Safaricom is further seeking to have the Communications Authority re-balance frequencies shared between the three companies.

    “The second is the need to rebalance the frequencies allocation. Post-merger, AirtelTelkom will jointly hold 77.5 MHz of the spectrum against a customer base of 17.3 million, compared to Safaricom’s 57.5 MHz with almost double the customer base at 31.8 million,” added Michael Joseph.

    According to Safaricom, if Airtel and Telkom Kenya are allowed to merge without reorganization of frequencies, the transaction will create a disproportionate imbalance in the spectrum allocation, which will be inconsistent with the market share.

    Safaricom through its acting CEO is also calling for equal treatment of operators and creation of a level playing field within
    the industry, specifically in relation to licensing and operations requirements.

    The remarks by Safaricom come on the back of claims by Telkom Kenya that Safaricom is opposed and intends to sabotage the proposed merger with Airtel Kenya. According to Telkom CEO Mugo Kibati, Safaricom is seeking to frustrate the process with a view to monopolize the telecommunications sector to its advantage.

  • Why Sameer Africa Shareholders Should Be Worried As Company’s Reserves Drops To Sh265M

    Why Sameer Africa Shareholders Should Be Worried As Company’s Reserves Drops To Sh265M

    Sameer Africa has now depleted reserves significantly as shown in the just released HY June 2019.

    The reserves which stood at Ksh1.3 billion in 2013 now stand at only Ksh265 Million. With the current trend  shareholders book value currently at Sh52 as analysed below will only continue to be depleted.

    Shareholders Book Value Analysis

    Sameer Investment LTD controlling party owns 72.15 pc of the shares worth Ksh10 Billion while the rest of the 27.85% worth Ksh4 Billion are owned by minority shareholders.

    Just recently at the centre of huge losses, Simon Gachomo resigned after serving as Managing director since October 2018 to “Pursue personal interests.” During his tenor, the company saw it’s losses rising 15.8 times higher to Ksh 182 million for the first 6 months of 2019.

    Group revenue also dropped by 20 pc to Ksh930.2 million as its best selling tyre remained unavailable throughout the period. The company which imports tyres from China and India under contract manufacturing claims it has faced stock shortages and counterfeits which have hugely undermined the its performance.

    The company was forced to issue a profit warning back in December 2018 stating it’s earnings would plunge by 25% due to stock shortages. Compared to a the profit os Ksh80.4 million it made in 2017 the company posted a loss of Ksh686.4 million the year ended 31st December, 2018.

    The company is also struggling from a one-off Ksh877 million reorganization cost comprising of Ksh405 million it spent on impairment of raw material, Ksh179 million in fixed assets impairment and Ksh 293 million for staff redundancy.

    The new MD Peter Gitonga a board member since August 28th will now be tasked to steer the company to profitability and improved share value.

  • KQ Withdraws From JKIA Takeover Bid

    KQ Withdraws From JKIA Takeover Bid

    On Monday this week, Directorate of Criminal Investigations sent a  formal request for pieces of information and documentation that will aide in the Probe into previous mismanagement of formerly Pride of Africa- Kenya Airways.

    According to Kenya Airways, popularly known as KQ, the DCI’s probe will focus on the procurement of services for the maintenance repair and overhaul of aircraft engines at the national carrier.

    KQ which hires third party firms to carry out maintenance said they welcome the investigations and are engaging with the DCI team to provide necessary support and information.

    “This is part of our overall strategy to ensure transparency and integrity in all our procurement processes and operations,” Kenya Airways corporate communications said in a notice.

    DCI has not made the details of investigations open for perusal which makes it almost impossible currently to know which firms and individuals are being targeted under the commenced probe.

    However last week, reports emerged that former KQ chief executive Titus Naikuni was also under probe over Sh100 billion lost between 2003 and 2014. Detectives are also said to be probing the financial period between 2017/8 and 2018/9 inquiring about members of the procurement and tender committee for the same period.

    DCI communicated to the media through a letter stating that the probe will review everything from procurement and budget plans, tender advertisement/request for proposal, list of prequalified suppliers and tender documents for potential bidders.

    Sebastian Mikosz KQ CEO and managing director stated that the loss-making airline was no longer interested in pushing to run Jomo Kenyatta International Airport. The airline has since withdrawn the initially proposed Privately Initiated Investment Proposal (PIIP).

    The proposal fell through when it reached Parliament that instead recommended the establishment of an Aviation Holding Company to consolidate the country’s aviation assets, including the nationalization of KQ.

    “KQ’s board and management believe that the PIIP has catalyzed important discourse about the future of Kenya’s civil aviation, which is now being led by the Government of Kenya. Kenya Airways looks forward to continued collaboration with all involved stakeholders of the process,” said Mikosz.

  • How Email Hacks Are A Threat To Businesses Globally

    How Email Hacks Are A Threat To Businesses Globally

    Have you ever been hacked? If not, then invest in cybersecurity a lot because email hacking or what is dubbed as Business email compromise (BEC) attacks in the tech world have overtaken both ransomware and data breaches.

    According to Insuarence Giant AIG, BEC has been recorded as the leading main reason why companies filed a cyber-insurance claim in the EMEA region last year alone.

    Statistics published by the firm in July revealed that BEC-related insurance filings accounted for 23 percent of all cyber-insurance claims received by the company in 2018.

    Of those surveyed, almost half (47%) have been hit by a ransomware attack as a result of an employee opening a suspicious email and 31 percent fell victim to a business email compromise (BEC) attack. However, the majority (75%) of organizations have been hit by a brand impersonation attack.

    • One trillion phishing emails sent every year
    • Hackers target Office 365 business accounts
    • US presidential candidates aren’t using basic email security

    According to Barracuda research, finance departments are the most targeted by email-borne cyber-attacks according to 57 percent of respondents. Though 32 percent said that customer support was their most targeted department which could signal the start of a new trend among would-be attackers.

    According to the Communications Authority of Kenya, local organizations were hit by 11.2 million cyber threats. This records a 10.1 percent increase in the number of incidences in the first quarter of 2019 when compared to the previous quarter. CAK’s incident response centre detected growing cases of malware, web application attacks, system misconfiguration, and mostly online abuse.

    Incidents related to ransomware came in second place and accounted for 18 percent of all cyber-insurance claims in the EMEA region. Data breaches caused by hackers and data breaches caused by employee negligence tied for third place with both at 14 percent.

    According to AIG, the recent rise in cyber-insurance claims from BEC attacks was caused by poor security measures at victim companies including the use of poor passwords for email accounts, not using multi-factor authentication and the lack of employee training about email-based attacks.

    Although BEC attacks currently hold the top spot, AIG expects that ransomware may regain its top spot soon. As ransomware became more targeted, the number of ransomware-related cyber-insurance claims dropped last year. This is because those launching ransomware attacks have begun to target businesses and government organizations as opposed to consumers. The number of incidents may be lower but the attackers behind them are receiving larger payouts.

    As enterprise and government victims learn that they can offset losses by filing a cyber-insurance claim, AIG believes that the number of claims will go up despite the smaller number of ransomware infections recently. This trend has already become widespread globally and a recent investigation discovered that insurance companies are now advising victims to pay the ransom demand and then file a cyber-insurance claim afterward.

    AIG also found that GDPR has affected the number of cyber-insurance claims filed as businesses can no longer hide data breaches and have to disclose them under the regulation. Now companies are publicly revealing their data breaches and filing a cyber-insurance claim to help cover some of their costs and any fines levied against them under GDPR.

    A fifth of all the cyber-insurance claims AIG received in 2018 included a public GDPR notification. However, the firm found that these claims included costs that were significantly higher than those did not include a GDPR data breach notification.

    Here is a source highlighted and review of the best antivirus software of 2019.

     

  • DCI Probes Dubious Cash Transactions In The New Sh1,000 Notes Change

    DCI Probes Dubious Cash Transactions In The New Sh1,000 Notes Change

    The ongoing demonetization of the old a thousand notes has attracted the attention of the Crime busters at the Directorate of Criminal Investigations who have now focused their keen eye and investigating cases of fishy cash transactions that have been flagged by banks.

    Central Bank Governor Patrick Njoroge says some of those cases are of people who wanted to change over Sh5 million to new currency notes.

    “We have shared the information we have gathered so far with the DCI for further investigations. Our role as the regulator is to work the investigating agencies to ensure that we achieve our goal,” Dr. Njoroge said.

    CBK Chair stated that the banks have collected more than 100 million pieces of old Sh1,000 notes out 217 million pieces that were in circulation when the demonetization started and the investigations on people holding illicit money would continue even after the old notes are phased out from September 30.

    • Shilling drops to its lowest level in nearly two years

    “We expect to collect more notes as the deadline nears because most people like doing things the last minute,” CBK Chair said while on a media interview.

    Dr. Njoroge, however, ruled out 100 percent success of the demonetization, saying some have of the cartels have laundered the illicit proceeds in properties in the country and abroad.

    CBK caught the country by surprise on Madaraka Day when it announced that it was withdrawing the Sh1,000 notes in a bid to counter counterfeits, corruption and money laundering.

    • Shilling strengthens after CBK sells dollars

    During demonetization, individuals exchanging less than Sh1 million of the old notes and non-account holders were instructed to exchange them through the currency centers, CBK branches, and commercial banks. Bank customers and non-account holders having an excess of Sh5 million are required to get Central Bank’s approval.

    The old generation Sh1,000 banknotes will be worthless papers from October 1, 2019. CBK has said it is working with forex bureaus, payment service providers, money remittance providers, investigative agencies and other financial service providers to ensure all due procedures are followed.

    Kenya is not the only State that has changed their currency, India scrapped 500 and 1000-rupee banknotes in 2016 to flush out tax evaders a move that flopped as it did not achieve the desired goal as 99 percent of the money still got back into the system.

    Africa’s self declared most debt-ridden country,  Nigeria,  introduced a new currency and banned the old notes in 1984, under the Muhammadu Buhari government. But this caused chaos and was blamed for the inflation that followed and crashed the economy.

    Ghana also attempted a similar move in 1982 when it ditched its 50 cedis note to deal with rampant tax evasion and empty excess liquidity. It had the downside of fuelling a currency black market.

    North Korea tried this in 2010 but ended up leaving citizens with no food and shelter after Kim-Jong ll knocked off two zeros from the face value of the old currency in order to kick out the black market.

    There have been at least five success stories where the exercise worked for the economy and resulted in the intended outcomes.

    These include Pakistan (2016), the UK (2002), Australia (1996), and the EU (2002). Zimbabwe attempted in 2015 and succeeded having gone for the US dollar.

  • Safaricom’s Market Value Thwacks All NSE Listed Firms

    Safaricom’s Market Value Thwacks All NSE Listed Firms

    According to NSE records, Safaricom’s dominance domestically has strengthened even more after the telecommunication firm’s market valuation exceeded 50 percent of the Sh2.22 trillion stock exchange market.

    At Close of Thursday, Safaricom’s valuation of Sh1.13 trillion which is now 50.7 percent of total investors’ wealth at the Nairobi Securities Exchange (NSE) is a factor that is largely attributable a sharp drop in the market capitalization of other listed firms.

    According to the NSE records, Safaricom Crossing the 50 percent threshold means that its market worth is now more than the combined valuation of all the other 62 listed companies.

    In March this year, Safaricom achieved its highest-ever market capitalization of Sh1.27 trillion but the company has avoided the deep erosion of value that other companies have suffered, pulling down the benchmark NSE 20-Share Index to a 10-year low.

    Safaricom’s share price has gone up by 25 percent or Sh5.70 this year to hit Sh28.25, adding more than Sh228.4 billion to its market valuation at a time when many other companies, including other blue-chip counters, are stuck in a price slump.

    Since January, NSE All-Share Index and market capitalization have gained 5.1 and 5.7 percent respectively due to Safaricom’s dominance, but the NSE 20-Share Index is down 13 percent to a 10-year low of 2,467 points.

    NSE Investors who track the indices are therefore presented with a situation where overall market wealth has gone up by Sh120 billion, but the benchmark index is touching multi-year lows. The divergence in the direction of the two indices is due to the huge influence the Safaricom stock has on the All-Share Index, which is market cap weighted.

    On the price-weighted NSE 20-Share Index, other blue chips such as East African Breweries Limited , BAT , Standard Chartered  and Bamburi  that carry a higher nominal share price have a greater weight.

    As it has been before, Capital Markets Authority (CMA) regularly flags the influence the top firms have in terms of traded activity and investor wealth as a market risk such that should the companies encounter a shock or fall into difficulties, the effect on the stock market would be far pronounced.

    “During the second quarter of the year, the top five companies by market capitalisation accounted for 70.8 percent, the highest in the last four quarters, confirming their dominance in the Kenyan securities market,” said CMA in its quarter two market soundness report released earlier this month.

    Safaricom’s valuation gain has been helped by its high profitability that has in turn driven up shareholder dividends and lack of large listings at the NSE in the past decade, which has coincided with the growth of the Safaricom share price by more than 700 percent in the period.

    In March this year, Safaricom reported a 14.7 percent growth in net profit to Sh63.4 billion on the back of strong M-Pesa and mobile data performance, marking a seventh straight year of a rising bottom-line.

    Safaricom is paying shareholders a dividend of Sh1.25 per share, totaling Sh50.08 billion, and on top of that, a special dividend of Sh0.62 a share totaling Sh24.84 billion while other NSE firms are struggling to remain profitable in a tough economy.

    Since June 2018, a total of 16 listed firms across different market segments have issued profit warnings, with their earnings collectively plunging by more than Sh14 billion. Nine out of the 13 segments of the market have recorded a drop in market capitalization, the worst hit in relative terms being the commercial and services sectors whose collective valuation has fallen by 55 percent or Sh43.5 billion this year to Sh35.2 billion.

    The manufacturing segment has seen a marginal decline of 1.4 percent in capitalization from Sh219.2 billion to Sh216 billion, while construction has gone down by 15.7 percent from Sh61 billion to Sh51 billion.

    Insurance firms have also declined in value, by 18.6 percent or Sh15.7 billion to Sh68.8 billion, while the energy segment’s collective market capitalization has come down by 15.8 percent or Sh12 billion to Sh63.7 billion.

    On the Banking sector, which is the second-largest at the NSE after the single-stock telecommunications segment, has eked out a 0.3 percent gain in market capitalization to stand at Sh626.5 billion. Bank stocks have recorded a mixed performance in the market despite the sector remaining one of the most profitable at the NSE, with five out of the 12 listed lenders seeing their share prices fall this year.

    Central Bank of Kenya data shows that in the six months to June, banks in the country recorded a 12.6 percent increase in gross profits to Sh85.8 billion.

    Safaricom controls approximately 64.2 percent of the Kenyan market as at December 2018. Safaricomhad a subscriber base estimated at approximately 31.8 million.

  • UAE Freezes Funds To Expand World’s Largest Airport

    UAE Freezes Funds To Expand World’s Largest Airport

    Plans to expand Dubai’s Al Maktoum airport, the Emirate owned and designed to be the world’s biggest and busiest Airport has hit a dead-end after funds running the project were frozen indefinitely.

    According to sources speaking to the media, The expanded Al Maktoum was to have an annual capacity of more than 250 million passengers. Insiders state that the move to expand the airport was put on hold as Gulf Arab economies oscillate.

    People involved in the project spoke to the media on anonymity stating that the set-aside and budgeted construction activity has been halted and finances for expansion frozen until further notice.

    The completion date for the first phase of the airport envisaged as a $36 billion super-hub allowing locally based airline Emirates to consolidate its position as the world’s No. 1 long-haul carrier, had already been pushed back five years to 2030 in October.

    In a statement to the media, Dubai Airports said it’s reviewing the long-term master plan stating that the exact timelines and details of next steps are not as yet finalized. The statement further said that it aims to ensure development takes full advantage of emerging technologies, responds to consumer trends and preferences, and optimizes investment.

    According to Forbes records, Dubai’s economy slowly grew since 2010, and last year as the Gulf’s chief commercial center grappled with fallout from geopolitical tensions and a low oil price.

    Even though the Emirates remains based at the original Dubai International hub as it mulls how best to develop its strategy of carrying passengers between all corners of the globe, tourism has been stagnant since 2017 because the company is finding it tougher to add profitable new routes, and it is reworking its fleet plans with the cancellation of the Airbus SE A380 super-jumbo.

    The Capacity of Al Maktoum was to increase to 130 million passengers on completion of its first phase of expansion, according to the October update. The design ultimately calls for the hub to handle 260 million, based on prior statements, more than twice the customer total at the world’s busiest airports today.

  • Sourcing From China: How Chinese Firms Are Benefiting From Kenyan Contracts

    Sourcing From China: How Chinese Firms Are Benefiting From Kenyan Contracts

    Chinese companies in Kenya are increasingly hiring more locals, a new report has shown.

    The Kenya China Economic and Trade Association (KCETA) said last year alone, its affiliate member enterprises created more than 50,000 jobs for locals, up from 42,000 in 2016.

    The report indicates that there are 106 Chinese companies operating in Kenya, with nearly 95 percent of their workforce being Kenyan. “Having chosen to take root in Kenya, many Chinese enterprises are continuing with their localisation drive…”read the report.

    Chinese companies, both private and State-owned, have been increasingly eyeing Africa for investment opportunities.

    Most of the jobs created by Chinese firms are in the manufacturing and service sectors, which account for 62 percent of the total number of these firms in Kenya.

    The report does not indicate whether the workers were casual labourers or contract workers. Almost all positions with no special skill requirement were filled with locally recruited employees. The presence of Chinese companies in Kenya has been proven to test labour laws over concerns over Chinese labour practices often viewed as unfair.

    Foreign Affairs Chief Administrative Secretary (CAS) Ababu Namwamba commended the firms and urged them to take advantage of the conducive environment to grow even as he challenged the same to observe ethical business practices.

    Some of the Chinese firms come with racist attitudes and slavery work ethic. Just recently in a video that went viral, Liu Jiaqi, a Chinese national, was deported by the Kenyan immigration for racial slurs against his Kenyan colleagues.

    Cheap labour on the continent is fueled by the high rate of unemployment. Cheap labour is nothing new in Chinese work environments. When this is brought to African countries where Africans are overworked and paid peanuts, the government must step up and do something about it.

    Apart from taking loans from the Chinese,  The Kenyan government and labour union have more work to do about how their people are treated under employment by the Chinese firms.

  • Jambojet Wins In Airlines Ranking In Africa

    Jambojet Wins In Airlines Ranking In Africa

    Kenyan low cost carrier Jambojet has been ranked as the airline with the youngest fleet in Africa.

    In a report by global aviation intelligence provider ch-aviation, Jambojet’s average aircraft age is 4.3 years compared to the continent’s average of 16 years, the oldest globally.

     

    “This recognition is yet another validation of our commitment to keeping customer safety at the core of our business. We remain committed to matching our words with action which is why we made a business decision to only acquire brand new aircrafts,” said Allan Kilavuka the CEO of Jambojet.

    Norwegian Air Sweden tops the list as the commercial carrier with the youngest fleet of aircraft on a global scale.

    “Our data clearly shows that Asian airlines continue to see tremendous growth, especially the low-cost carriers. This coupled with good access to capital for new aircraft leads to the youngest fleets being in this part of the world” said Thomas Jaeger, ch-aviation CEO.

    The analysis by CHUR – Swiss airline intelligence provider ch-aviation, looked at the youngest fleets for larger airlines separately, because fleet renewal for those airlines is more complex and would require more capital than for small start-ups.

    The average aircraft flying the globe is 12 years old, shows the report that analysed more than 30,000 active commercial passenger and cargo aircrafts.

  • Airtel Kenya Gets First New SIM Numbers From Communications Authority of Kenya

    Airtel Kenya Gets First New SIM Numbers From Communications Authority of Kenya

    Airtel Kenya has won over their main competitor telco giant Safaricom after they were given the first prefix numbers by Communications Authority of Kenya. Airtel customer will now have new mobile numbers bearing the new 01 prefixes.

    This comes months after CA rolled out new numbers and Airtel Kenya was offered three million of the new numbers. Bharti Airtel Limited an Indian global telecommunications services company based in Delhi, India the owners of Airtel Kenya will be the first telco to roll out new prefix number series of 0100, 0101 and 0102 to their customers.

    Airtel’s main competitor Safaricom had applied for the same but was allocated two million lines with the prefixes 0110 and 0111. The move by the CA was necessitated by the exhaustion of existing prefixes including 0722, 0723, 0733 and 0734.

    Image result for Airtel Kenya CEO Prasanta Das Sarma

    Airtel Kenya CEO Prasanta Das Sarma urged subscribers to take advantage and be the first ones to have access to the new numbers by registering with Airtel.

    “We are glad to be the first telco to roll out the new prefix numbers and we urge Kenyans looking for new connections to visit any of our SIM selling outlets or Airtel shops and get their new numbers,” Mr. Sarma said.

  • Losses: KQ Pays For 3000 Guests Monthly In Five Star Hotels Because Of Delayed Flights

    Losses: KQ Pays For 3000 Guests Monthly In Five Star Hotels Because Of Delayed Flights

    In the first 15 days of August, the loss-making Kenya Airways has canceled more than 52 flights and delayed 40 percent of its trips this year alone and all the expenses are taken care of by the taxpayers.

    A confidential memo leaked to the media has exposed financial details of the frequent flight cancellations with, according to the memo, In just seven months of this year alone, KQ spent Sh 118 million to settle huge accommodation bills for their guests in Nairobi’s five-star Hotels and High-end restaurants.

    KQ, had earlier this year posted a net loss of Sh7.55 billion for the year ending December 2018, as higher costs offset a jump in revenue which hit Sh114.18 billion earlier this year largely driven by passenger bookings.

    Sources talking to the media states that the trigger of the hard questions that have put the top management officials on the spot was a flight cancellation involving a member of the First Family in Paris early this month.

    This year’s KQ OTP reports indicated that 182 of the canceled flights were caused by crew shortage occasioned by pilots and crew failing to turn up for work.

    “During flight delay or cancellation, Kenya Airways is expected to provide essential services such as accommodation, meals, and ground transportation as the situation requires. With an increasing number of these incidents, the costs of hotel accommodation and meals have been above budget by 250 percent,” the memo says.

    The KQ Chief Executive Officer Sebastian Mikosz told the staff on Thursday in an internal newsletter that since the beginning of summer schedule, the OTP (on-time performance) performance of KQ has deteriorated significantly due to crew constraints.

    The total number of guests who have been provided with accommodation on account of delays stood at 19,345 for the seven months, or an average of 2,764 per month, hemorrhaging a carrier that has never seen a profit for over a decade.

    The airline’s average on-time performance at 15 minutes in the seven months of this year, stood at 77 percent, having dropped from 82 percent over a similar period last year.

    “The main factors that have affected OTP include technical issues, crew constraint, ATC (air traffic congestion) in European destinations and radar failure in Nairobi,” Mr. Mikosz said.

    Pilots’ unavailability is becoming a sticking issue, with insiders saying that the CBA it signed with the Kenya Airlines Pilots Association (Kalpa) is biting hard.

    Flight data shows that out of KQ’s  35,035 successful departures this year, only 22,426 (or 60 percent) were on time, with 2,814 having been delayed by more than an hour. More than 9,600 departures suffered delays of up to one hour. FlightStats, a global flight tracking service, ranks KQ at position seven, with the worst average delay of 61.1 percent out of the 13 airlines polled.

    On their defense, KQ stated that pilots were to blame for the rise in the flight disruptions under the crew shortage reasons, mostly because of what they termed as a ‘restrictive CBA the airline has with pilots’.

    Kalpa CEO Captain Muriithi Nyaga has rubbished off saying that it is inaccurate to place the blame on pilots.

    “Since last year, we have been seeking to recruit contract pilots across the fleet (those trained and authorized to fly the different models (Boeing, Embraers) as all other airlines do.

    “However, due to the very restrictions by pilots, we are only allowed to recruit pilots on the Embraer fleet. You will appreciate that in this part of the world, Embraer is a relatively new aircraft, so there are very few trained pilots capable of flying this type of aircraft,” KQ’s head of corporate affairs Dennis Kashero said 

    “It is true that they met last week and I am awaiting their report. At the same time, we have given the management full support as they renegotiate the CBA with the pilots. Our position is clear, that we will not allow any sabotage of such a national asset from any quarters as we try to seek the best for the airline,” Transport Cabinet Secretary James Macharia said on Sunday.

    In my opinion, the memo is a bridge to unearth massive fraudulent deals these so-called five-star Hotels in the city. Politicians, take, for example,DP Ruto has invested in Hotels that only get government guests. Weston Hotel, for instance, is one of the Hotels that accommodate guests that apparently KQ pays their bills from taxpayers pockets. Such external deals are the reason KQ just like any other parastatal is dangling between bankruptcy and closure.

  • Jumia Fires Nigerian Employees Involved In Ksh7.6 Bn Sales Fraud

    Jumia Fires Nigerian Employees Involved In Ksh7.6 Bn Sales Fraud

    The Loss-making Berlin-based company Jumia, has fired some of its employees in Nigeria and suspended a number from other African countries in a move to curb improper sales practices on the online marketing platform.

    Speaking to media, Jumia’s Technologies AG  stated that they had identified dubious transactions that accounted for approximately 4 percent loss of Jumia’s sales in the first quarter of 2019.

    According to the online company, independent sales agents under its “J-Force” sales platform in Africa worked with employees and sellers to make undeserved gains from commissions and seller fees.

    This is coming at a time that Africa’s biggest e-commerce business company had announced KSh7.6 billion loss in the second quarter of 2019. Jumia revealed that improper orders which were placed and subsequently canceled inflated its order volume.

    Jumia reports that it has adjusted its Gross Merchandise Volume (GMV) to account for the fraudulent transactions as well as suspended employees involved pending investigations. The improper orders inflated the retailer’s GMV by around Ksh1.82 billion between the last quarter of 2018 and the first two quarters of 2019.

    Jumia has been hit by a massive fall in its stock price due to the increased fraudulent activities being masterminded by and ministered by Jumia insiders all over Africa. Jumia’s losses increased by 60% from KSh4.8 billion in the first half of 2018 to KSh7.6 billion in the first half of this year.

  • Kenya Export Promotion and Branding Agency (KEPROBA), to take over the roles of Exports Promotion Council and Brand Kenya

    Kenya Export Promotion and Branding Agency (KEPROBA), to take over the roles of Exports Promotion Council and Brand Kenya

    In a special Kenya Gazette notice dated 9th August, 2019 issue 565, President Uhuru Kenyatta established the Kenya Export Promotion and Branding Agency as the successor to the Brand Kenya Board established by the Brand Kenya Board Order, 2008 and the Export Promotion Council established on the 19th August, 1992 through Gazette Notice No. 4342 of 1992.

    The new Agency will be headed by Jas Bedi as the Non-Executive Chairperson with Jacqueline Muga, Kathleen Kihanya and Mark Bichachi serving as private sector representatives on the Board for a three year period.

    Other Board members include the Principal Secretary for Trade, the Attorney-General or his representative and the Principal Secretary for the National Treasury.

    The Principal Secretary for Trade Dr. Chris Kiptoo while congratulating Mr. Bedi on his new appointment said the functions of the Agency would include advocating, coordinating, harmonizing and implementing export promotion, national branding initiatives and policies that promote Kenyan goods and services in export markets.

    KEPROBA would also be required to promote and brand Kenya as a supplier of high quality goods and services, and ensure that there is harmonized application of the national mark of identity for Kenyan goods and services while also being mandated with the task of collecting, collating, disseminating, serve as a repository of trade and Kenya brand information, encourage and monitor the observance of international standards and specifications by exporters.

    The Agency will be guided by market development, promotion and national branding, trade information, business counseling service, enterprise and product development, research and policy facilitation while discharging its duties

  • Is Kenya Settling The China Loans With Crude Oil

    Is Kenya Settling The China Loans With Crude Oil

    Kenya exported the first batch of her crude oil from Ngamia 1 fields to China in what seemed like a breakthrough, but Kenyans should expect no revenues from the sold oil yet from China.

    Andrew Kamau, the Petroleum principal secretary said that the government will use the 1.2 billion, supposed to be received from the sale, to cover for the expenses that the explorer incurred in market testing for the crude.

    Mr. Kamau had previously revealed that Kenya had sold the crude oil to ChemChina UK Ltd and a selected delegation of the ministry of petroleum is set to visit Ngamia 1 to explain to Turkana leaders so that they explain to locals of what to expect from the inaugural sale of Kenya’s crude.

    “We will be meeting all the leaders next week to explain to them what the sale means because, as we have always said, the Early Oil Pilot Scheme is a market test and not necessarily a commercial venture,” Mr. Kamau said.

    According to the PS, the government is, apparently supposed to recover the cost of setting up the oil drilling machines, rehabilitation of storage tanks and expensive trucking of the crude that saw the pilling of 200,000 barrels headed for Beijing in two weeks.

    In a nutshell, the government’s upfront cost recovery from the sale of oil to China means the EOPS may not yield any petrodollars until the project reaches its full development which is projected to be in the year 2022.

    “I think we have begun our journey and it is up to us to ensure that those resources are put to the best use to develop our country to make it prosperous and to ensure we eliminate poverty in Kenya,” President Kenyatta said.

    What comes as sour news is that, Turkana, according to Kenya National Bureau of Statistics ranking, is among the top poorest counties in the whole of Kenya. Last year’s household integration survey revealed that Turkana county alone accounts for close to 15 percent of the hard-core poverty in Kenya. The country is also food-deficient, with 66.1 percent of its population considered food poor.

    Personally, I think the government is playing with not only people’s emotions but also money. The State itself has the said stats and reports of what the people of Turkana should get from the start of this project. See people can’t question everything that’s going on right now because the same very government has declined to disclose its production sharing contracts with British oil explorer Tullow.

    Constitutionally, the Petroleum Act 2019, provides for profit-sharing between the national government (75 percent), county government (20 percent) and the local community (5 percent), but that will only be known after the cumulative cost of the Early Oil Pilot Scheme is done, including how the cost will be recovered.

    See the government should have told the people of Turkana and Kenyans at large that they were, allegedly, intending to pay off the huge accumulated China grants and loans with the crude oil. The fact is that Kenya and China kept their deals secret, with even the announcement of the crude oil buyer coming two weeks after the deal was made.

    Nobody knows clearly, maybe those deeply involved in the Petroleum Ministry and the government, why Tullow Oil insisted that the buyer would remain secret, citing a ‘non-disclosure agreement,’ moments before PS Kamau revealed that they had settled on the Chinese oil multinational.

    “Non-Disclosure Agreement does not allow us to reveal the name of the winning bidder unilaterally. However, the process was competitive; a group of target buyers was invited to bid for the crude with the winning bidder selected based on the price offered,” Tullow country manager Martin Mbogo said.

    This comes at a time when a coalition of 16 civil society organizations from the Kenya Civil Society Platform on Oil and Gas had been pushing for full disclosure of the contracts which specify how the costs incurred by Tullow Oil will be recovered when oil is sold.

    “A normal production sharing contract has a cap on how much is allocated to cost recovery to ensure every year you still get some money. It may take long to make full cost recovery, which is usually a recipe for suspicion, especially from local communities,” KCSPOG Coordinator Charles Wanguhu said 

    We can’t clearly know what the government is doing, rather it will do with the funds that will be generated from the sale of this precious crude oil. It also remains unclear to know how much Tullow Oil has spent in the Turkana Oil fields and the recent audit that had been commissioned by the government yet to be made public for perusal.

  • CBK To Crackdown Unlicensed Online Forex Dealers

    CBK To Crackdown Unlicensed Online Forex Dealers

    Central Bank of Kenya Chair Patrick Njoroge has warned Kenyans from conducting business with the unlicensed and unregulated online forex dealers who, according to the Institution, are planning a massive swindling scheme.

    According to CBK, the now increased online forex dealings are conducted by a web of fraudsters who, if not regulated as soon as now, many Kenyans who have enrolled in the business risk being conned.

    “The attention of CBK has been drawn to the unlicensed and unregulated online forex dealers and platforms that put Kenyans at risk of losing their money,” said CBK.

    CBK through its chair has advised Kenyan to always double-check the licensing status of the online forex dealers from the CBK websites to confirm authenticity.

    CBK states that some of the characteristics of these unregulated fraudster dealers and platforms include, purporting to offer the best forex deals in the market, lack requisite licenses issued by CBK or Capital Markets Authority, inadequate anti-money laundering and consumer protection safeguards.

    “The platforms are downloadable on Google Play and Apple App store, and aggressively market themselves through social media and mass emails,” CBK further stated.

    In the event where some have already been defrauded of their cash, CBK officials said that the victims, if any already, should report their case to CBK through the Banking Fraud Investigations Unit.

    CMA Chief Executive Paul Muthaura In October 2018, said he observed several individuals and entities carrying on or purporting to carry on the business of an online foreign exchange broker or a money manager without the relevant license by the Authority.

    “The Capital Markets Authority (CMA) has issued only one license to EGM Securities Limited) to operate as a Non – Dealing Online Foreign Exchange Broker,” Muthaura said in a statement.

    CMA has assured those in the forex business that the Authority will take necessary measure and appropriate action against any persons illegally conducting online foreign exchange trade.

  • State Freezes Embattled Tycoon Humphrey Kariuki’s Assets

    State Freezes Embattled Tycoon Humphrey Kariuki’s Assets

    The Director of Public Prosecutions was last Friday granted permission by a Nairobi court to freeze all of billionaire Humphrey Kariuki’s property. Milimani Resident Magistrate Caroline Nzibe granted the freezing injunction against Kariuki on August 9.

    Kariuki, the owner of an alcoholic beverage company, African Spirits Limited, is accused of evading taxes to the tune of Ksh41 billion.

    Some of the tycoon’s assets that have been frozen include ships, aeroplane’s among other immovable property.

    The embattled billionaire on Thursday, August 15, moved to court to have an the court order freezing all his assets lifted, saying “his beverages business will suffer”.

    Through his lawyer, Benjamin Musyoki, Kariuki says the freezing order may result in the “shut-down, crippling and even thwarting of his other business, Wow Beverages Limited”. “In view of the grave excessive, punitive and unjustified harm loss, damage and prejudice, Wow suffers loss of business,”

    The freezing order will remain active until Kariuki’s case is heard and determined, the court said on August 9.

    Billionaire businessman Humphrey Kariuki, has seen a warrant of arrest issued against him over a Sh41 billion tax evasion scam.

    Kariuki is said to be out of the country, with reports indicating he was last seen at an airport in South Africa.

  • DCI Sleuths Have Unearthed Missing Paper Evidence In The Fraud Case Against Former KPLC Bosses Ken Tarus And Dr Ben Chumo

    DCI Sleuths Have Unearthed Missing Paper Evidence In The Fraud Case Against Former KPLC Bosses Ken Tarus And Dr Ben Chumo

    Director of Criminal Investigation detectives have found the vital tender documents in the Sh400 million suit where former KPLC Chief Executives Ken Tarus and Ben Chumo—are in court for irregular purchase of faulty transformers have been recovered.

    Nairobi High court was today, Wednesday told that the procurement documents, which had mysteriously vanished from Kenya Power offices had been retrieved from different files.

    Speaking before the High court, two witnesses told senior principal magistrate Kennedy Cheruiyot that the vital documents relating to tender documents were scattered in different files. The missing documents were tenders papers for purchase of 708 transformers by a firm called Muwa Trading Company for Sh408 million, but 327 of them turned out to be faulty.

    Dr. Chumo and Ken Tarus have been battling it out with the State in courts as DCI Prosecutors stated that this Transformer Tender also flouted procurement rules for State entities.

    A senior supply chain manager based in Thika, Mr. Justin Maina, told the court that the Directorate of Criminal Investigations sought documents relating to Muwa Trading Company, which has been accused of supplying faulty transformers to KPLC.

    According to Maina the transformer tender Document, which had 12 tender documents relating to the procurement, went missing and they were forced to look for them in the other files.

    Maina was attesting in a case in which former KPLC Secretary Beatrice Meso together with the former head of supply chain John Ombui as well as Ruth Oyile, had been charged with conspiracy to defeat justice. It is alleged that they led to the loss of original tender documents, knowing that they would be required for an ongoing criminal case.

    The three accused KPLC officials are alleged to have committed the offense between May 4, 2015, and June 12, 2018.

    However, Maina stated that before he was transferred to Thika in September 2018, his team had managed to reconstruct the file after retrieving the documents. According to Maina, sometimes in December 2016, a woman known as Doris from the legal department took a total of 38 files from his desk, but she later returned them although he did not check inside.

    Responding to a question asked by lawyer Migos Ogamba for Ms. Meso and Mr. Ombui on- whether the accused persons were responsible for the loss of the documents- Mr. Maina told the court that, once documents have been moved to the bulk filer in the registry, they cease being one’s responsibility as many people would access them.

    Another prosecution’s witness Ms Joyce Walowa said that some officers used interns to change the files, in spite of the fact that although she could not recall who gave the claimed instructions.

    Ms. Walowa who has worked for KPLC for more than 22 years, stated that the DCI requested the documents when she was the acting supply chain manager logistics.

    “We conducted the search as a team and we were not able to get the file intact. The team was able to retrieve the documents from different files,” Ms. Walowa said.

  • Samsung Partners With Microsoft To Knock Out iPhone’s Market Dominance

    Samsung Partners With Microsoft To Knock Out iPhone’s Market Dominance

    Samsung, a South Korean multinational coalescence and mobile marker headquartered in Samsung Town, Seoul has invigorated its partnership with Microsoft Inc through a new series of apps and features such as OneDrive storage for photos and better syncing between the phone and computer in a move to take on the massive market dominance that Apple, the  iPhone maker has since enjoyed for decades.

    During the Unpacking event of the new rather, redesigned Galaxy Note 10 and Note 10 Plus, Microsoft CEO Satya Nadella said the new features will also help Samsung to better take on the Apple’s iPhone that launched their iPhone XR mid this year.

    Samsung and Microsoft have been working together to offer features that have now made the Galaxy Note 10 phones work more easily with PCs. The phones will include Microsoft’s Your Phone app by default, allowing text messages to sync between a phone and a Windows-powered PC.

    According to Samsung, their mobile users will be able to make and receive calls on the PC later this year too when finer detailed and upgraded features will be finalized.

    Samsung’s phones can also use Microsoft’s OneDrive service to store photos. And Microsoft’s popular Outlook email program, as well as its Office productivity suite of Word, Excel, and PowerPoint will be included with each Galaxy Note 10.

    “From calls and text messages to emails and photos, we’re making these everyday experiences great and the interactions between all the devices seamless,” Microsoft CEO Satya Nadella said this at Samsung’s Unpacked launch event that was held in New York yesterday.

    This partnership, which expands on Microsoft’s previous work with Samsung, isn’t just a marriage of convenience, Nadella said. “The combination of Microsoft intelligent experiences and Samsung’s powerful, innovative new devices, like the Galaxy Note 10 and Galaxy Book S, make this possible.”

    Tech is a field for the best innovators and makers. The battle between Apple and Samsung seems to have taken a different route, as it has been, Apple the iPhone maker has always had an upper hand with its sleek software updates and upgrades. iPhone’s handoff technology lets you start an email on an iPad and finish it on the Mac.

    Apple’s iWork productivity suite, including its Pages word processor, Numbers spreadsheet app and Keynote presentation software, is free to every Mac and iPhone user. According to genius tech minds, Apple’s iCloud Photo Library service is considered to be the best competitor to Google Photos.

    The features merger between Microsoft and Samsung can begin to bridge that gap and sooner or later, HiOS makers, which are the biggest global mobile distributors, can seat at the table and comfortably talk Tech with iOS markers.

    “The ability to take that magic between an iPhone and Mac and bring that to Samsung is big. The tie-up makes even more sense when you consider that most people tend to use whatever comes with their phone. So using Outlook email by default will give Microsoft a boost,” said Creative Strategies analyst Carolina Milanesi.

    “Microsoft has always struggled to do well in mobile and to have a strong mobile partner. Microsoft may also benefit from offering access to Microsoft services in a way that’s not just through an app, but rather directly integrated into the phone. It makes the Note a real productivity device,” said Anshel Sag, an analyst at Moor Insights & Strategy.

    Personally, I think that Microsoft will even, if not sooner, start selling Samsung’s Galaxy Note 10 in its stores if everything goes as planned, which will be a genius step for the almost being irrelevant corporation that develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services.

  • Struggling Betin Kenya And Sportpesa Now Sues State For Freezing Their Accounts

    Struggling Betin Kenya And Sportpesa Now Sues State For Freezing Their Accounts

    Problems continues to follow Betin Kenya which despite affirmation of tax compliance was the first betting firm to have their accounts frozen by the state on accusations of non-tax compliance by the KRA.

    Tax collector accuse Betting Firms of owing up to Sh200B in what prompted a crackdown on the firm’s. Last week, the government went ahead with the threat and froze pay bill numbers of betting firms including Betin and Sportpesa both of whom have now gone to court to challenge the State’s decision.

    The companies insists that they’ve complied with all the tax obligations terming the state’s move as blackmail. Now they want the government to compensate for the betting losses incurred during the period that their accounts have been frozen.

    According to reports, SportPesa has sued seeking compensation for the days it has been out of business after the government ordered Safaricom to stop processing payments for sports betting companies.

    The betting firm and its rival Betin Kenya say the July 12 switch-off of its M-Pesa pay bills and SMS short codes are illegal because they both have court orders allowing them to continue operating despite being denied licences by the State.

    Both firms want the suspension of their payment systems lifted and the chairman and top executives of Betting Control and Licensing Board (BCLB) jailed or fined for ordering the switch-off despite the court order.

    They also want the court to quash a notice issued by BCLB to Safaricom that disabled their SMS short codes and M-Pesa paybills.

    The two firms, which are among the biggest in the sector, were among 27 firms whose betting licences had not been renewed, pending the outcome of an inquiry on suitability to operate. The gaming companies largely rely on Safaricom’s network to take bets, communicate with users and process payments through paybills.

    In the past weeks, Betin associated with Gamcode Ltd has been struggling to stand on its feet and continuously giving its customers affirmations despite them complaining of being unable to receive betting wins which was attributed to government’s move to freeze their accounts citing non-tax compliance.

  • Choppies Stores Are Shutting Down Across The Country

    Choppies Stores Are Shutting Down Across The Country

    Choppies supermarket has shut down its Kiambu town branch just days after the retailer closed the Bungoma outlet.

    The Botswana owned retail stores were closed owing to stock shortage and debts.

    The Kiambu Mall developer in 2017 picked Choppies as the anchor tenant dropping also collapsing former market giants Nakumatt Supermarkets.

    The developer said that was arrived at due to financial difficulties around Nakumatt, a similar fate now suffered by the Botswana retail chain.

    Early last year audit reports after closure of debtridden Uchumi and Nakumatt revealed massive revenue losses adjudicating to infighting at the management level, as it is with Choppies Management in Botswana.

    The retail’s other outlets across the country are also dangling with empty shelves.

    Kisumu, Nanyuki, Embakasi and Mombasa road branches are at the edge of closure.

    Chopies has six, all struggling, branches in Kisumu city and eight others spread across Nakuru, Kisii and Kericho.

    “Choppies workers have not been paid in full to date. They have also failed to pay suppliers for a while now and this explains the closure of some branches and empty shelves on others. The supermarket is now dealing with similar issues faced by Nakumatt and Uchumi,” said Kenya Union of Commercial, Food and Allied Workers (KUCFAW) Secretary General, Bonface Kavuva.

    Choppies are barely 4 years old, they ventured into the country by taking over Ukwala Supermarkets in 2016.

    Choppies troubles blew up in 2018 when Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange halted the trading of its shares over the retail’s failure to release financial results for the year ended 30 June 2018.

    The retailer has since been facing innumerable challenges with the latest being the suspension of its CEO Ramachandran Ottapathu.

    Earlier in March, the board announced that the company would embark on legal and forensic investigations and would follow its recommendations which saw Ramachandran fired in May.

    Choppies operations are currently in seven African countries.

    The retailers stores operating in the new markets are down to 212 from 260.