Category: Business

  • Was Safaricom System Hacked Again Or An Internal Sabotage

    Was Safaricom System Hacked Again Or An Internal Sabotage

    Barely a week has passed since Safaricom system fault enabled customers to acquire data bundles free of charge. Social media postings revealed that a system malfunction at Safaricom’s headquarters on 28 June had enabled customers to acquire bundles of up to 64 GB of data free of charge.

    Safaricom would immediately detect and rectified the glitch that had many ‘lucky’ customers acquire themselves the luxurious platinum package.

    However, this wasn’t the first, Safaricom has in the recent past been faced with serious system glitch with the biggest being a data breach where the company has been taken to court for. Internal fraud cases is something Safaricom continues to struggle with as it keeps coming.

    Safaricom has been sued for Sh115Trillion for breaching the data of 11.5 Customers. According to the petition filed in the High Court by one Benedict Kabugi, the telco breached the privacy of 11.5 million of its customers by exposing their sports betting history and biodata.

    “The data, which the petitioner herein viewed personally, was specific to gamblers who had used their Safaricom mobile numbers to gamble on various betting platforms registered in Kenya,” said the petition.

    In the suit, the data allegedly contained specific identifying details of subscribers, including full names, their mobile phone numbers, gender, age, identity numbers, passport numbers as well as the total amounts gambled.

    In the same case, two Safaricom ICT employees Simon Billy Kinuthia and Brian Njoroge were charged in court for trying to obtain Sh300 million from the company by transferring priviledged information on a subscriber from the company’s database and sharing it with an unauthorised person.

    In 2017, a man from Niger shocked the Milimani Law Courts when he confessed that he was behind the network outage that telecommunications giant Safaricom suffered on April 24.

    Mohammed Sani, claimed that the recent Safaricom network outage that triggered panic across the country was planned and executed from his cell at Industrial Area Prison in Nairobi.

    “I know everything that happened the day Safaricom shut down; we did it in my prison cell.

    “I have all the evidence and people in prison who are willing to come out as witnesses to support my claims so that they are not seen as baseless allegations,” Sani claimed.

    On 3rd Wednesday July, another disaster struck the region’s biggest teleco, this time it was on their Twitter page. Users realized unusual responses from the official account which at first was attacking government officials in the wake of the new CEO search following the death of Bob Collymore.

    One of the tweets posted from Safaricom’s official Twitter page attacking government official the CS. Has since been deleted.
    More attacks wedged on Itumbi who’s the Presidency’s Digital Strategist, from the Safaricom’s official Twitter account.

    That wasn’t the end of it, there were some other random tweets from the account that pointed at unusual behavior and a serious problem. All these tweets have since been deleted from the account and these are screenshots we collected from affected users.

    Some of the deleted posts.

    Safaricom in a damage control move and probably after taking back the account, acknowledged the tweets and made a public apology.

    System Glitch? For those of you who use Twitter know what a system glitch would do, while most corporates automates their replies, the replies from Safaricom were obviously not automated but personalized to the tweets replied to.

    Because of this fact, there are several possibilities as to what exactly would’ve happened. First, the handlers of the account forgot to switch accounts, see most of these corporates have social media handlers who use bulk tweeting apps like Tweetdeck that can use multiple accounts on one app, one has to manually switch between the accounts to make post.

    So in a scenario where the handler is using both their personal account and the firm’s, they can forget to switch and post wrong tweet in the wrong account. In the Safaricom’s case, we can theorize that handler A forgot to switch to switch from Safaricom’s and thought they were tweeting all along on their personal handle where the language is free.

    Second scenario is the Twitter account was compromised. Kenya Insights has managed to talk to a few insiders at Safaricom and there’s rife speculation that a disgruntled ex employee who possibly had log in credentials to the official account, gained access and made the raunchy tweets. Well this we can’t independently confirm as it remains mere allegation.

    Another scenario is also just a hacker doing it for fun. Unlike in many cases where anonymous hackers gain entry, there’s no group that has claimed responsibility so this is out of question leaving the above two theories the most likely but not necessarily the real reason.

    Or maybe we can just speculate that someone was drunk at work. You obviously don’t expect an official admission of failure and Safaricom to take responsibility, naturally a coverup would be most ideal.

    With cases of ‘technical hitches’ continuing to hit Safaricom which basically holds the economy of Kenya given its dominance not only in the money transfer, calls and data services, a lot of security questions and concerns continues to arise.

    One would question how secure the Safaricom system is and the security of customers data now that there was recent data breach. One would also ask if the social media accounts can be compromised or suffer a hitch as they say what else can be compromised and the mechanisms put down by the company to avoid similar problems.

    Squad Digital Media a subsidiary of ScanGroup Kenya handles the social media pages alongside Safaricom’s internal communications team. We’re informed that investigations are underway to determine the cause of last nights glitch.

  • Sh30B Lost As Cyber Attacks Rises To 11M In The First Quarter In Kenya

    Sh30B Lost As Cyber Attacks Rises To 11M In The First Quarter In Kenya

    Kenyan organizations have recorded an increase in viscous cyber attacks.

    According to 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.

    According to Communications Authority of Kenya (CA) data, its incident response centre detected growing cases of malware, web application attacks, system misconfiguration and mostly online abuse.

    In past 3 months, CA’s cyber sleuth team issued 14,078 cyber threat advisories to the affected organisations.

    Late quarter of 2018, the cyber security team from CA issue 12,138.

    A cyber fraud report conducted by Serianu Cyber security tech consultancy reveals that cyber attacks costed Kenya’s economy Sh29.5 billion.

    Increased Cyber threats has forced firms, especially in the financial sector that is affected the most, to be vigilant and created businesses opportunities for others.

    For instance, Safaricom #ticker:SCOM in January launched a cybersecurity solution targeted at Kenyan firms looking to protect their ICT systems.

    Microsoft are also interest in partnering with local companies to assist in securing their infrastructure.

    Microsoft Corp is set to launch a $100 million technology development center in Nairobi, Kenya .

    Microsoft’s independent report indicated that ransomware, a malicious software that blocks a user’s access to gadgets until a payment is made, is the popular method used by cyber criminals this year.

    “As local organisations increase investments in cyber security, it is becoming vital for them to also create awareness about these threats among their employees to ensure that they are able to notice some them,” reads part of Sebuh Haileleul report.

    Sebuh Haileleul is Kenya’s General Manager for Microsoft, East Africa.

    Polish cyber security firm, OnNet tech Services had warned Barclay’s Kenya and other financial institutions via a tweet published on 17th of April, stating that ‘SILENTCARDS’ group of hackers were planning to hack into their ATMs.

    OnNet services had also published on their blog a fortnight ago that they believe the hacking malware threat from SilentCards is still active in many other institutions.

  • DCI Launches Investigations Into Postpaid Billing Fraud At KPLC

    DCI Launches Investigations Into Postpaid Billing Fraud At KPLC

    DCI sleuths have officially started investigations into an alleged postpaid billing fraud at Kenya Power.

    On 27th of June, DCI had summoned 200 Kenya Power staff and customers summoned to record their statements at its headquarters.

    According to DCI director George Kinoti, millions of monies were lost through a collusion between the staff, brokers and over 5,000 customers.

    Those directors at KPLC and private companies implicated will report to the DCI headquarters on diverse dates in July for further questioning.

    A source at DCI headquarters told this site that Tens of the suspects have already recorded their statements with DCI detectives.

    Fraud cases have hit most of state-owned parastatal.

    This is not the first time senior managers at KPLC are being arrested and questioned.

    July last year, KPLC managing board was arrested over the procurement of defective transformers and the irregularities in pre-qualifying 525 companies.

    18 Kenya Power staffs were dismissed after an audit report revealed that 350 out 500 contractors did not meet the set criteria.

    Government auditors recommended investigation of 19 Kenya Power employees that had shortlisted companies registered by their cronies and relatives.

    Kenya Power has been at the center of corruption for ages, last year, KPLC spent 15 times more to buy power from Independent Power Producers (IPPs) compared to Kengen.

    Kenya Power’s electricity purchase costs summary for 2018 seen by this site records that KPLC spent a total of Sh64.8 billion to buy 10.7 billion kilowatts of power from 19 producers up from Sh60.4 billion in 2017.

    Kengen was the biggest beneficiary of which they sold 7.9 billion kilowatts at Sh37.02 billion.

    Our checks reveals that Kenya Power bought a kilowatt of power from Triumph Power Generating Company at a cost of Sh69.26 compared to Sh4.63 from Kengen.

    Other IPPs including Gulf Power Limited sold a kilowatt at sh26.34, Iberafrica Power at 16.96, Power Tecnology Solution at sh14.70 and Tsavo Power sold a kilowatt at Sh11.77.

    Also Orpower 4 Inc, a subsidiary of Israel owned, OrmatTechnology, a firm listed on New York Securities Exchange sold 1.18 billion kilowatts to Kenya Power which earned them Sh11.4 billion.

    This means Orpower 4 inc sold a kilowatt at Sh9.68, more than double that of Kengen.

    Ethiopia sold 18.3 million kilowatts to Kenya at Sh27 per unit and Uganda 1.26 billion kilowatts at Sh6.54 per unit.

    This is, amongst other irregularities that the DCI are investigating, is what saw KPLC Managing Director Ken Tarus suspended.

    Our investigators checks reveals a list of the most notorious companies on the DCI’s radar;

    Moi University Campus (North Rift), Safaricom Investments Co-op Society Ltd, Nairobi Womens Hospital, Uchumi Supermarkets (North Rift), Holy Cross Fathers (Nairobi North) and Dandora Catholic.

    Detectives will also question the involvement of Sasini Coffee House Limited, Turbo Highway Eldoret, Eldoret Polytechnic, Franscisca Sisters of Anna (Western Kenya) and Seventh Day Adventist Church, South Nyanza on the billing fraud.

    Here is the full list of those summoned by the DCI

  • He Saw It Coming And Cried In London Hospital, Why Bob Collymore’s Wife Wambui Kamiru Was His Greatest Pillar All Through

    He Saw It Coming And Cried In London Hospital, Why Bob Collymore’s Wife Wambui Kamiru Was His Greatest Pillar All Through

    Safaricom CEO has succumbed to cancer and the family has announced that his burial will be held tomorrow in a private ceremony. It appears Bob Collymore was prepared for his journey all along and had everything written down.

    Heres a prolific man whom despite having been the most criticized CEO in the country, has been eulogized as a great person, leaving behind a family of four, Collymore has been mourned by many people across the divide.

    Collymore suffering from acute leukemia, had to take time off from his position at the leading teleco to seek treatment abroad. This was the first time his personal health struggles came to the surface.

    In an interview with Steve Biko, Bob came out personal in what might just be the only available personal revelations he left us with. Below is an excerpt from Bob’s interview with Bob where he opened up about his health, family and subtly his death.

    The Late Safaricom CEO and Founder of Safaricom Jazz, Bob Collymore with his wife Wambui Kamiru.

    Having just turned 60 not too long ago, what was been your greatest revelation of the 50s?

    I think I had a lot more self realisation in my 50s. In my 40s I was still hunting around. I left UK for Japan and then to South Africa where I started to gain a defined sense of purpose, began to understand there is privilege in working in an environment you can make a difference in.

    The other significant thing that happened in my 50s is that I adopted my daughter — we have a 50-year difference between us. That was a great thing.

    My 50s is also when I was diagnosed with cancer and to think of life and wonder if things will work out; will I get back to Nairobi or is this it; and when I look back at my life how do I feel about that.

    I had a conversation with my daughter and she said, ‘daddy you’ll come back, you are a good man.’ I asked why and she said, “Because of what you do for girls, for children through Safaricom and what you do for the poor.”

    For my 10-year-old daughter to say that, to say “you are a good man,” really mattered a lot to me. So I said if I don’t see 61, I’m good.

    Has your purpose shifted, what’s your purpose in your 60s?

    That’s a good question. I know purpose is to help as many people as I can to do the right thing. I have talked about cancer children at KNH on palliative care, children who know they will die and not dying in the best circumstances.

    My question is; can I sway people or the government to do the right thing for them? Can I make business deals that will look at the climate change or impact it in a good way? Can I do more to encourage great transparency, reduce fraud and corruption?

    Have you always been clear what you wanted? Was this ever part of the big idea?

    I was always clear that I wanted a bigger car and a bigger house, like most people, really. [Laughs].

    I wanted these things because they show status but at some point, I must have been 45-years, these things changed. I started asking what do I want to do and why?

    I was in Japan then with my family and my son had just finished school and I thought, ‘what is important to me now?’ and at that time it was my son’s happiness. But was the car I was driving then, a Jaguar XKR Sports, going to guarantee his happiness?

    I started to think about the society he was living in and the future he was going to occupy and my role in making it better. That was my turning point. Life was never going to be about the size of car I drove.

    Bob Collymore is the CEO of Safaricom and a cancer survivor. PHOTO| COURTESY
    Bob Collymore is the CEO of Safaricom and a cancer survivor. PHOTO| COURTESY 

    Did you ever cry when you were in hospital?

    I think I did. Once or twice, in the early days. There was a period of uncertainty, when I didn’t know exactly if I had cancer or not but everything was indicative that perhaps I had it.

    I came to that realisation in London at the hospital when it dawned on me that it was cancer. But I don’t think I cried because I thought I was going to die, I think I cried because I started to realise how much everybody else cared.

    And I cried in response to the messages. It was a death moving messages, even the sea was moved. Everybody at Safaricom and just the general Kenyan public, strangers, acquaintances, friends, just wishing you well.

    How can you tell which people align themselves to you because you are the CEO and those who genuinely connect with you because you are Bob?

    It’s tough. I remember many years ago, Wambui asked me the same question. I said I don’t and that’s why I only have one friend, unfortunately that friend died. She said wow.

    But over the eight years of being here, we’ve seen more and more people emerge as genuine friends or people who genuinely care. So I have a very small circle of good friends, and they come from different kind of backgrounds. It’s tough for people like me because we actually want people to care more.

    So who now tells the emperor when he’s naked?

    Wambui does. Also, him [points at Urbanus Musinga, his Executive Assistant]. He is likely to tell me when I’m doing stupid things…

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    What’s the most stupid thing you’ve done in nine years as CEO?

    (Chuckles) Why are you asking this question? Because I have to go through so many things that I have done to pick the most stupid thing I’ve done.

    They’re many. My mind is in paradise to think about it now. [Pause] I think some bad HR decisions — the firing was more about the timing rather than if I should have done it or not.

    Then there are commercial decisions, we made some wrong calls. [Pause] We do stupid things everyday, I do stupid things every day.

    Has this experience of battling cancer changed your perception of mortality?

    [Pause] Death is inevitable and I have made the decision not to cling on the thought of it because it will eventually come; I just do not know when.

    I have chosen to focus on the things that are more important to me. Now I know it’s kind of impossible for somebody to live for 200 years.

    [Chuckles]. But something very important is that when you have cancer the idea of death is near, and so it doesn’t surprise unlike you who is healthy, but death could be coming in the next minute or tomorrow morning.

    Has it changed how you do business?

    To some extent it has. It has allowed me to let more people manage me. It’s made us focus on the things that are important because not everything is important, not all arguments are important.

    You do not always have the last word on something and you do not always have to be the first person to say something. Just shut up and listen and do not have to always say anything. When you spend a lot of time on your own, you realise that silence actually is a pretty good thing.

    Because music is a big thing in your life, if you’re to pick a song that captures the moment you were fighting cancer, what song would that be?

    That’s a tough question. There’s a difference between me and my wife, she listens to the words, I listen to the music. So for me it’s a bit more abstract, it’s about the sound, not the words. So I don’t think I can pick a song that says, that’s where I was.

    But during this time I did listen to a lot of “Grandma’s Hands,” by Gregory Porter and Ben LOncle. Grandma’s Hands actually is a nice song because it does take me back a lot because my grandmother had such a huge impact in my life. Probably the single most important person in my life.

    You have been married once before…

    Three times! [Laughter in the room] But divorced twice.

    Bob Collymore and his wife Wambui on their wedding day. PHOTO| FILE| NATION MEDIA GROUP
    Bob Collymore and his wife Wambui on their wedding day. PHOTO| FILE| NATION MEDIA GROUP 

    How do you do it three times? What is your reason for coming back over and over, is it love? Faith? What is it?

    Each time it’s got better. Each time the match has been better. There are stuff I couldn’t have done better for sure.

    And is blame which I have to take. Hopefully I have learnt from some of it. What keeps me coming back? [Pause] I think I never set out to remarry, I think I just meet someone who, we lived together for a while before we got married, so someone who you think I can spend the rest of my life with because we care for each other.

    The first marriage was a mistake for sure. I was too young — in my 20s. The second one was not a mistake, what was a mistake was how we conducted it.

    Now we’re actually very good friends with Clare because we have children in common and she has been very very supportive because she’s gone through cancer herself in the UK and she kind of gives me tips on how to deal with some of the challenges that I face with the chemicals they’re about to pump into me. She frequently reached out to Wambui and say why don’t you come down for the weekend?

    When you were in that room, alone, with your thoughts, did you discover anything about yourself?

    Yes, actually I did. [Pause] I don’t know if I should say it…I should in the spirit of honesty. [Pause] I had hundreds and hundreds of well-wishers sending me messages to get well soon, some who are strangers, business rivals, acquaintances and all and I stopped and asked myself, “would I have done the same thing?” [Long pause] The answer is no. That realisation didn’t fill me with pride, knowing that I was not the nice person I thought I was.

    Does it get easier – marriage – when you keep getting married?

    I think it does get easier providing you’re mature enough to learn lessons from the last time round. If you’re not mature then you’ll keep repeating the same mistakes.

    Do you think as you grow older you become a better husband?

    I think you should become, I don’t think you always do. There are some old guys who don’t do anything constructive.

    I don’t think it necessarily follows that age imposes your standing as a husband. There are some pretty stupid old husbands and some pretty stupid young husbands.

    Because you have a blended family, how do you make sure that everybody else is getting along?

    That’s a trickier question to answer because it is complex. There are lots and lots of people involved. So my side, I’m really lucky in the sense that my ex-wife has met a guy who is fantastic.

    They’re getting married again next year. He’s a good man.

    He would go to such extent just to make sure that I can see my daughter. When I was sick he would drive her and then leave her for the Saturday.

    RIP Bob Collymore.

  • How Airtel Employees Conspired To Steal Sh670M From The Teleco

    How Airtel Employees Conspired To Steal Sh670M From The Teleco

    Airtel Kenya has recorded a massive insider corporate theft that has seen Sh670 million lost through its mobile money transfer platform.

    Airtel Kenya, one of the brands under Indian owned Bharti Airtel, has to reveal more of its financial details because they are preparing for a listing in the London Stock Exchange.

    Airtel Kenya is under Airtel Africa a subsidiary of Bharti Airtel from India.

    Airtel Africa was established after Bharti Airtel bought Zain Africa’s mobile operations in June 2010.

    Airtel Africa is currently operating in 15 countries; Chad, DRC, Gabon, Ghana, Zambia, Madagascar, Malawi, Niger, Nigeria, Congo, Rwanda, Seychelles, Tanzania, Uganda and Kenya.

    The Economist ranked Airtel Africa the 2nd on the markets after MTN. The Economist records indicated that it had 89.3 million as of March 2018.

    Our sources at the Financial Times have told us that Airtel Africa is targeting a valuation of £3.6bn as they push for an IPO listing in London.

    According to our sources, Airtel Africa IPO’s Price ranges between 80p and 100p.

    They will have a market capitalization of between  ksh384 billion to Ksh463 billion.

    Currently, Safaricom is leading in Kenya with a market capitalization is Ksh1.91 trillion.

    With that out and aside, documents submitted by Airtel Kenya in London Stock Exchange reveals that it lost Ksh670 million through insider mobile money fraud.

    Airtel Money chiefs have faulted the massive loss to its employees.

    This fraud was revealed by Airtel Kenya’s parent firm Airtel Africa, which indicated that only Sh86 million of the sh670 was recovered through insurance.

    “In 2018, incidents of cash control frauds were identified in the group’s Airtel Money operations in Kenya which involved circumvention of the group’s controls by Airtel Money employees and resulted in losses of $6.7 million (Sh670 million)” Airtel Africa company said.

    Airtel Kenya has admitted that despite the introduction of what they called ‘stringent controls’ to check on fraud, risks posed by their employees could not be completely eliminated.

    “Additionally, technical or administrative errors could result in customer losses for which the group could be responsible, and the group may be liable for fraud and problems related to inadequately securing group payment systems,” Reads part of the Airtel Africa statement.

    Telco insider fraud is on the rise in Kenya, Two weeks ago, two Safaricom senior employees were arraigned in court for unlawfully copying and transferring private consumer data.

    Brian Wamatu, head of Safaricom’s regional expansion for mobile money, and Simon Billy Kinuthia denied charges of copying the private data between May and June this year.

    They are also separately charged for attempting to extort Sh300 million from Safari company.

    Safaricom has also sued Benedict Ndung’u for allegedly obtaining and possessing the stolen data from the two employees.

    The duo appeared before Chief Magistrate Francis Andayi and denied the charges of computer fraud and demanding money by threats.

    Magistrate Andanyi ordered the duo to deposit Sh1 million cash bail each to secure their freedom.

    Airtel Money has been dangling their growth cut in a market where customers rely on efficient services and money transfer.

    Even though proven to be profitable, Mobile money services is without doubt the riskiest investment on the current market.

    And with such stakes at hand, revelations like this makes Airtel money not only a risk for the markets but also unsafe for customers, who not unless, they are protected, will leave rendering them insignificant.

  • Safaricom Breached The Privacy Of 11.5M Customers By Exposing Their Sports Betting History, Biodata And Now Sued For Sh115 Trillion

    Safaricom Breached The Privacy Of 11.5M Customers By Exposing Their Sports Betting History, Biodata And Now Sued For Sh115 Trillion

    Kenya’s giant telecommunication company Safaricom has been sued for violation of private data of over 11.5M customers.

    The Sh115 trillion lawsuit is now the biggest consumer suit after that of Coca-Cola.

    Coca-Cola was sued by Busia, Funyula area residents after one of their distributor sold them contaminated drinks that left 5 people dead.

    With that out and aside, High Court received a petition last week from Benedict Kabugi, one of the Safaricom subscribers who has accused the telco of breaching the privacy of 11.5 million of its customers.

    Kabugi says in a petition that Safaricom has exposed him and other of the company’s customers data details to sports betting history and biodata.

    Benedict Kabugi says an individual who had in his possession the personal data of more than 11.5 million Safaricom subscribers, including his approached him last week.

    “The data, which the petitioner herein viewed personally, was specific to gamblers who had used their Safaricom mobile numbers to gamble on various betting platforms registered in Kenya,” reads part of Benedict’s petition.

    This high magnitude Lawsuit is the first of its kind to be leveled against a mobile service provider in Kenya.

    Kenya’s data protection law Bill has been shelved by Jubilee administration in the August house for almost a decade.

    Sources speaking to this site says there are two duplicate bills currently set for debate by the National Assembly Before being forwarded to the Senate.

    This lawsuit represents a violation of Article 31 of the Constitution which protects the privacy of communication.

    Benedict says the data he saw contained specific identifying details of subscribers, including full names, their mobile phone numbers, gender, age, identity numbers, passport numbers as well as the total amounts gambled.

    Kabugi also reveals that the data had the make and type of devices used by the subscribers as well as their location.

    Benedict told this site that he was arrested and detained by the Police when he went to report the breach at Safaricom offices.

    This is not the first time for Safaricom to be directly involved in data breach dealings.

    Last week, two senior Safaricom employees were arrested and charged in court for trying to obtain Sh300 million from Safaricom’s database.

    Sources speaking to this site say they were arrested after successfully transferring priviledged information on a subscriber from Safaricom’s database.

    This lawsuit will expose more breaches in Safaricom and other telcos like Airtel, Telkom, Faiba, Equitel…

    State’s involvement in Safaricom makes them the most targeted telco by backdoor dealers and hackers.

    If the lawsuit goes through and the Court finds Safaricom liable, this will definitely make them the most unsafe place anyone could ever trust their data and privacy.

  • Trouble At Urithi As Investors Feel Scammed

    Trouble At Urithi As Investors Feel Scammed

    Urithi like many of property developers continue to become under close scrutiny following steady collapse of such firms.

    Urithi which was founded by its current chairman Samuel Maina and the embattled televangelist David Kariuki Ngare who left in 2013 to set up Gakuyo Real Estate and later Ekeza Sacco, which is in the middle of storm after allegedly swindling its members over Sh1 billion.

    A local daily recently sent shivers down many investors spine when they ran an expose ‘Urithi’s housing bubble bursts as bank puts its land on sale’ the report indicated that trouble was brewing at the firm.

    Apparently, two of Urithi’s housing ventures are in trouble one is up for sale while developers in another property in Thika have been kicked out by the previous owner who says Urithi failed to pay him the balance.

    The failure of Ekeza and Gakuyo which are associated with Urithi given founders history, has left a number of investors in worries and constant fear of collapse. However, the chairman has come out defensively giving assurances to consumers all is well.

    Urithi’s Panorama Gardens project that was marketed and sold by Urithi as ready plots for immediate development and attracted 400 investors, with an eighth of an acre going for Sh2.25 million.

    The investors now claim they cannot develop the property because most of them have never been issued with title deeds while some are only in possession of ownership certificates or agreements they entered with Urithi.

    This is not the first time Urithi developers are faced with troubles. Last year, investors who bought property behind Mang’u High School, dubbed Tola 3 and Tola 4 saw their beacons demolished by the owner of the land they had bought partitioned plots.

    Ms Jane Wachira is one of the affected investor. She bought two undeveloped plots measuring 40×80 in 2018 for Sh2.4 million at Tola 4 and has never been issued with title deed and the owner of the land has demolished her property in the said plots.

    Ms Mercy Kamau also bought a plot at Tola 3 in 2017 measuring 40/80 at Sh925,000 from Urithi.

    Last year the vendor who sold the said land to Urithi dug a trench on her property and brought down the beacons claiming that Urithi did not clear paying for the land and she has no documentation showing that she bought the land from Urithi.

    In a letter dated April 29, 2019 to Urithi, the Equity bank appointed Nairobi-based Antique Auctions Agencies to oversee the sale of another project land by Urithi dubbed, Gatanga homes to offset a debt of Sh263 million.

    This Urithi case echoes problems that many other property investors are facing. Many have been conned money and left with properties they cannot sell or develop.

    It’s even painful to some who have loans they cannot service due to poor projection, mismanagement or a housing crunch from projects they blindly invested in.

    Reply

    Urithi Housing Co-operative Society Ltd has refuted claims that two of their projects are been delayed over conflicts with the vendors.

    In a public notice issued on Thursday, Urithi said that one of the projects which was faced with controversy, the Panorama Gardens, was cleared after negotiations with the Bank and members of the project.

    “The property was acquired through a Bank loan with a five-year repayment plan. For the past three years, the facility has been regularly serviced. Following a fruitful deliberations between the Urithi Secretariat, the bank and members of the project, an amicable solution was arrived at on the clearance of the balance,”read the notice in part.

    Initially, it was reported that the land was up for sale through Nairobi-based Antique Auctions Agencies with a 45-day notice for redemption, to offset a debt of Ksh263 million.

    Another project which was affected was the Olive Tola 3 & 4, where developers were said to have been kicked out by the original vendor, claiming that he was yet to be paid his full amount.

    Responding to the allegations, Urithi said that an agreement had been reached upon by Urithi and the vendor, hence the conflict was resolved.

    “Meetings held between the Urithi’s Secretariat and Members of the project have recommended and agreed on the acceleration of payments to the vendor. This has been ongoing process which culminates to the issuance of title deeds,” added Urithi chairman Mr Samuel Maina through the notice.

    The Real Estate company indicated that they had so far, since inception, issued over 7,121 title deeds to investors.

    “Despite the challenges, through this model, Urithi has been able to complete and hand over to our members houses from as low as Ksh495,000 for self-contained studio apartments, to Ksh3.6 million for a three bedroomed bungalow on its own compound. These include Own A Room project in Juja, Springs View Estate project in Thika, Juja Plainsview Estate in Juja, GEM I in Witeithie and Lanet Homes in Nakuru,” added Maina.

  • Kenya Airports Authority To Auction Fifteen Aircraft Abandoned At Wilson Airstrip

    Kenya Airports Authority To Auction Fifteen Aircraft Abandoned At Wilson Airstrip

    Kenya Airports Authority has listed Fifteen aircraft abandoned at the Wilson Airport for an auction.

    The abandoned aircraft had been declared a safety risk by KAA over 3 years ago.

    KAA which heads operations, safety and security at all Kenyan airports issued a one month notice to claim the aircraft after which they will be auctioned to recovery the accumulated parking and landing fees.

    KAA has also demanded that the politician owners of the aircraft must pay all incidental costs including the Gazette publication.

    “The auction shall be defrayed against any incurred charges and the balance if any shall remain at the owner’s credit but should there be a shortfall, the owner shall be liable thereof ”  Reads a Kenya Gazette notice published by KAA

    One of the abandoned planes is owned by a former Presidential aspirant and the current proclaimed face of opposition.

    The abandoned Dutch model F27 with a wing span up-to 29 meters, is registered under 5X-FFD, which is a Ugandan registration number series. Local aircraft bare 5Y as their registration series.

    Also Read:Court Orders For The Auction Of Buzeki Enterprises Limited Company Assets

    Canadian owned Knight Aviation planes are also listed on the auction.

    They have abandoned 3 smaller models of HS 748, a medium-sized turboprop airliner, and Beechcraft Baron (BE200 and BE)90.

    Phoenix Air, IAP Group Australia and Superior Aviation companies are also among-st owners the abandoned aircraft.

    KAA officials speaking to investigators of this site did not disclose the fees and penalties owed by the abandoned airlines.

    Our Wilson Airport sources say most of the aircraft have been abandoned for more than a decade.

    The charges and arrears of those flights have an accumulated value of millions of shillings.

    KAA said will auction those who are in serviceable condition and sell others as scrap metal after parts.

    KAA is also said to be closely monitoring 100 helicopters packed in Kenya which only fly duty free during electioneering period.

    Politicians and Business-people has invested heavily in buying helicopters but can’t afford to foot them consistently.

    According to KAA figures seen by this writer, It costs up to Sh170,000 per hour to lease a light plane in Kenya.

    Parking and landing is also charged by KAA which makes Owning, operating and maintaining a helicopter an extremely expensive thing in Kenya.

  • Reasons To Stay Away From Suraya If You’re Even Thinking Of Investing With Them

    Reasons To Stay Away From Suraya If You’re Even Thinking Of Investing With Them

    As the investment firm engages investors in cat and mouse games and going on PR overdrive to save their exposed scandals. More than 50 investors have filed formal complaints at the Economic and Commercial Crimes Unit (ECCU) against Suraya Property Group which is involved in a scam amounting to nearly a billion shillings.

    Suraya is being probed for allegedly swindling prospective home owners hundreds of millions of shillings in non-existent projects despite receiving full or partial payments.

    Majority of the complainants yesterday visited the Directorate of Criminal Investigations (DCI) headquarters for the third time in a month to record statements of how they were defrauded in imaginary off-plan house ownership.

    “In 2013, I paid Sh2.2 million for a house which was to be completed by the end of 2016. The cost of the house was Sh6.9 million and by 2016, I had paid Sh5.59 million. Upon asking why there were delays, both Muraya and Susan (directors)are always unavailable. Instead they send other people,” Joseph Laban said shortly after filing his complaint.

    Directors of the real estate firm, Peter Muraya and his wife Susan Muraya, who are also the proprietors of the firm, are set to have a date with investigators over the house purchasing scams that has dogged the firm for close to a decade now.

    “This involves commercial transactions. The criminal liability would come in if investigations show it was a deliberate scheme hatched to defraud,” a senior detective intimated.

    Complainants’ account indicate that they invested in off-plan house purchase but the projects have either stalled or have not started yet.

    Contractors engaged to undertake the construction are yet to be paid and have since resorted to auctioning Suraya land where the properties are located. They include Lynx Ngong Road, Lynx Nairobi West and Fourways Junction along Kiambu Road.

    According to disgruntled investors who now say they’ve been swindled and their dreams of owning homes crushed, below are some of the reasons a potential investor should take a deep breath if not keep off completely from investing with the firm:

    1. Suraya will market you a glossy looking property on a brochure and give you a spectacular discount if you buy off-plan. Fantastic offer!

    2. Suraya will force you to use their lawyers as your own and you won’t be allowed to bring your own representation. You will never see your sectional title deed, meaning you can’t sell or transfer.

    3. Once you make the the first payment and you are now in the bag, it’s Hotel California all the way. Once you go in you can’t come out. Severe penalties for pulling out or making late payments.

    4. Stones and construction material will be dumped on site to make you think they have started construction. If very lucky building will get to 80% construction. Forget about the gyms, pool,boreholes, generator, playground that were in the brochures. Just forget it.

    5. The construction itself will be 3rd or even 4th grade, pipes will continuously leak of sewage. All shortcuts possible in construction will be taken. Several contractors will be employed and fired along the way.

    6. Meanwhile if you dare call or visit their offices with any issue (unless making payment) you will be treated like the villain that you are! Unanswered calls, rude emails and broken promises all through. It’s like a bad bad marriage.

    7. If you do happen to eventually get tenants in your premises, prepare to charge far less than the market value, pay for so many repairs and never break even. You will receive complaints from the tenants day and night.

    8. The service charge they said they would pay for you for 10 years which you paid for in the purchase price? Forget about that. You will soon end up paying for the security firm, garbage collection, cleaning services etc just to keep it humanly habitable.

    9. If you are a mortgage buyer, since you can’t occupy your unit due to bank not signing off for lack of complete documentation, Suraya will rent out your unit and keep the money. You are now financing a used home instead of a new one.

    10. Once you take over your property, you will be shocked to find the power and water bills used during construction amounting to millions were not paid and now you have a house-warming gift to pay off with your fellow investors. Welcome to your new home!

  • How Employers Are Using Blackmail To Terminate Contracts  Without Paying

    How Employers Are Using Blackmail To Terminate Contracts Without Paying

    Most Kenyans who work for, or with foreign organizations get fired mysteriously with some going without pay as per their contracts.

    Most employers have found a way of firing their employees and blackmailing them so that their respective contracts get terminated prematurely.

    For instance, Dumus radio journalists were fired by their Italian boss from a community based station in Kibera and Ngong Kajiado.

    The two, Mark Mbao in company of his spouse Walley Mewange were arraigned at a Kibera court facing robbery without violence charges, in which they were accused of stealing Ksh 109,069 from their employers office.

    Vincent Nucci, a sub-Saharan Africa bureau Chief in charge of Italian Dumus Radio that operate From Ufungamano House, told Kibera Senior Resident Magistrate the two used their pass cards to access a safe room, which had the alleged cash.

    The Italian Radio Chief told the court that his human resource manager told him over the phone while he was in Italy that money had been stolen from his office.

    Nucci said he arrived at the decision of firing the couple after they were seen on CCTV entering the building.

    To make it clear, the two were neither seen entering the said safe room nor getting out with the cash according to CCTV footage at the radio station headquarters.

    The Kibera courts set 23rd July a hearing Day of the case.

    With that out and aside, most employers have developed this tendency of accusing someone before terminating their contracts.

    According to a City lawyer Dr Ocharo, most of employers use the courts to blackmail the common termination clause on contracts.

    Dr. Ocharo told this writer that blackmail is the shortcut solution being used by  majority of employers to get through a frustration of purpose crisis.

    “Frustration of purpose is that period when the aim behind entering a contract or viability of the employee goes away.” Dr Ocharo explained to the writer of this site.

    Also read:EACC Claims Kiambu Court’s Principal Magistrate Brian Khaemba Was Compromised To Give Governor Waititu A Sh500,000 Anticipatory Bail

    Most foreign employers claim breach of contract by using constructive fraud.

    Most employees get sued for fraud they unintentionally did or some blackmailed by a their employers on committing nonexisting fraud.

    Dr Ocharo said that Employers have found a loophole to avoid paying for the remaining part of the contract by using Constructive fraud to fire and expel valid contracts.

    Fortunate for most employers, our courts of justice have fallen for this unfortunate acts.

  • How Hackers Are Stealing Billions From Kenya’s Banks And Getting Away With It

    How Hackers Are Stealing Billions From Kenya’s Banks And Getting Away With It

    Barclay’s Bank, Kenya branches, lost a combined sum of sh11 Miillion over Easter this year.

    Polish cyber security firm, OnNet Services had warned Barclay’s Kenya via a tweet published on 17th of April, stating that ‘SILENTCARDS’ group of hackers were planning to hack into their ATMs.

    OnNet services had also published on their blog a fortnight ago that they believe the hacking threat from SilentCards is still active in many other institutions.

    OnNet Service Chief Technician and Innovator Stephanie Neringa told the investigators of this site that they are creating a global community awareness to minimize the loss of both finances and most important, the customers of local financial institutions.

    Stephen said their are having a hard time to accomplish their goals because most of our banks have poor or backdoor security loopholes that make them easy targets from SilentCards.

    OnNet Services Group innovator also said they have server information used by SilentCards hackers to loot over sh 450Million from a local Bank.

    Our efforts to get the details or the name of the Bank were fruitless due to nonexisting tech advisory contract between the Bank and OnNet Services.

    This is not the first time our local banking sector is losing billions of money to group(s) of hackers.

    March last year, National Bank of Kenya confirmed to have been successfully hacked. The hackers went away with key security details and a loss of over sh 29 million.

    Microsoft’s Cloud chief strategist Rudiger Dorn, said that cyber criminals looted over 800 million dollars globally in the past year.

    Earlier this year, CBK and Visa held a successful cyber security workshop that exposed how rogue bank officers collude with hackers swindle illiterate customers and ATM induced cash-outs.

    Visa sub-Saharan Africa Head of Risk and management Bevan Smith said hacker get hold of genuine cards that give them quick and easy backdoor access into banking system.

    Increased cyber threats prompted CBK to introduce cyber security guidance and guidelines in July 2017.

    Local Banks were required to file, compiled annual reports to CBK on their cyber security system and how they are curbing the threats facing their systems.

    These security guidelines were also imposed on mobile money transfer networks. With Safaricom’s M Pesa services being on top, they are legally required to notify CBK of any cyber security glitches within a period of 24 hours.

    Back to the elephant in the house, SilentsCards, are local Cyber criminals members of what was formally known as Forkbombo.

    These cyber crooks were named Forkbombo in 2016 by government cyber watchdogs because they used [email protected] to electronically get hold of keyloggers data.

    Kenya Revenue Authority, Banking Fraud Unit and Cyber Crime Unit of the DCI formally CID dismantled Forkbombo after the criminals 2 years of contacting cyber crime.

    In 2017, The DCI arrested
    Calvin Otieno Ogalo, a 35 year old former police officer and bank employee who was said to be the Forkbombo leader.

    Calvin Otieno was arrested alongside minor members and two American citizens. They were both charged and the two Americans deported.

    The cybercrime department of DCI said that Kenya lost over sh 17 Billions to hackers in 2016-2017.

    Last year, DCI detectives said that majority of cyber criminals in their custody had deep international connections with local and international Politicians.

    This international deep political connections of the hackers saw Kenya ranked 69 out of 127 most vulnerable countries by the Global Threat Index.

    OnNet services says that SilentCards regrouped in 2017 after obtaining the original keyloggers data from remaining members of forkbombo.

    “The latest code used in several banks after reversing has the main Def as OnKeyBoardEvent() and the files are usually saved as tech_kg.py,’’ OnNet Chief said.

    According to OnNet services, Silentcards attackers use these three passwords as their first attempts to enter into banking systems;
    a) admin123
    b) secret123
    c) welcome1

    Further investigations from OnNet indicate that Silentcards
    attacks copy and evaluate audit information from main data servers.

    OnNet service says that Forkbombo used to have money mules whereas SilentCards uses a well connected web of foreigners who get quick international backdoor wired transactions that later withdraw in a coordinated plan.

    Silentcards hackers are specialized in Python Scripts and also use advanced hacking
    tools like Empire, Metasploit, DeathStar, Bloodhound, CrackMapExec, Aesshell, XmultiShell, CHAOS and Katoolin.

    OnNet investigators said that they are following up a tip that GrapZone international hackers are now working with Silentcards to fully regroup Forkbombo and their viscous cyber attacks.

  • No More Room, CBK Governor Patrick Njoroge Warns Government From More Borrowing

    No More Room, CBK Governor Patrick Njoroge Warns Government From More Borrowing

    May 28 (Reuters) – Kenya’s headroom for new borrowing has shrunk since it tapped the Eurobond market this month and it is time for the country to begin reorganising its debt, central bank governor Patrick Njoroge said on Tuesday.

    Njoroge, whose term is due to end next month, told reporters that the $2.1 billion Eurobond issuance in mid-May allowed Kenya to refinance some of its existing loans and “hopefully (give) us more room to expand the economy” and increase export capacity.

    Kenya’s public debt as a percentage of gross domestic product (GDP) has increased to 55% from 42% when President Uhuru Kenyatta took office in 2013. The East African government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.

    Critics of the borrowing spree have questioned the value of some of the projects, particularly the billion China-backed railway project completed in 2017.

    “As advisers of the government, our point is this is the time to begin working on reorganising our debt, not in a frantic way, so doing it the Eliud Kipchoge way, which is (that) it’s a marathon (run) and you have to do it in a steady way.”

    The latest Eurobond was issued in tranches of seven and 12-year paper. The seven-year portion of the latest issue was priced at 7.0%, while the longer-dated tranche was priced at 8.0%.

    “It is important to say that the moment for dealing with debt reorganisation, looking at debt and itself reorganizing it,…that moment has come,” Njoroge said. He did not spell out how the debt could be restructured.

    Kenya is also negotiating with the World Bank for a $750 million loan for budgetary support, documents on the lender’s website showed on Tuesday.

    Njoroge declined to comment on whether his tenure will be extended for a second and final four-year term.

    The Kenyan economy expanded by 6.3% in 2018 as good rains boosted the agriculture sector. But a delayed start to Kenya’s rainy season this year could shave as much as 0.4% off forecasted growth, he said.

    “We are not talking drought like we had in 2017,” Njoroge said, “because the rains have arrived, and the question now is are they adequate?”

    The bank has forecast the same growth rate for this year, but the first rains, which usually start in March, did not come until late April.

    First-quarter growth data, usually released in June, would make the outlook for this year clearer, he said.

    The central bank held its benchmark lending rate at 9.0% on Monday, saying it would keep an eye on recent food and fuel price rises that could fuel inflation.

    The U.S.-China trade dispute had escalated to a “full-scale war”, Njoroge added, and posed risks to the Kenyan economy. Uncertainty over Britain’s planned exit from the European Union is another external risk, he said.

  • Citron Report Reveals Why NYSE Listed Jumia Is A Fraud

    Citron Report Reveals Why NYSE Listed Jumia Is A Fraud

    In 18 years of publishing, Citron has never seen such an obvious fraud as Jumia.  As the media in the US is naively anointing Jumia the “Amazon of Africa”, the media in its home country of Nigeria has a plethora of articles discussing the widespread fraud in this Nigerian company.  Not even that elusive Nigerian prince can cover this one up.

    Jumia is the worst abuse of the IPO system since the Chinese RTO fraud boom almost a decade ago.  Worse than being “the most expensive” US listed ecommerce company, Jumia reported financials show us a stagnant business that has burned through $1 billion and has moved the suckers game to the US Markets.

    In this report, Citron will expose the SMOKING GUN and show why the equity is WORTHLESS.  We believe investors cannot rely on reported numbers and a restatement of financials is on the horizon.  The SEC must protect US Investors.

    Full report here.

  • Kenya Airways No Longer Profitable

    Kenya Airways No Longer Profitable

    The former Pride of Africa, Kenya Airways, announced its annual financial performance this week.

    KQs Chairman, Michael Joseph said that 2018 was a very challenging year for the loss making airline.

    Kenya airways posted a pretax loss of 7.59 billion Kenyan shillings an equivalent of $74.93 million.

    In the last annual financial report, 2017, they posted the loss of Ksh 9.44 billion.

    The battling to remain relevant and regain profits Airline’s chief executive Sebastian blames the loss to high fuel costs.

    Sebastian has also said that KQ has super expensive personnel and their aircraft dealers are expensive.

    The CEO and the Chief Executive said they’re looking at other avenues to minimise the loses.

    “We started mitigating this risk by implementing a new hedging policy with minimal risk. Kenya Airways offers other services, technical and ground handling to domestic, regional and international customers” Sebastian emphasized.

    “We have however seen growth in passenger numbers. Management team have done a great job under the circumstances and thanks to the board for massive support. KQ is not just an airline but a strategic asset for the country. We should be proud of what KQ has done for Kenya & support, we can help improve the country’s GDP and create employment opportunities despite our challenges. We need support from media, investors and government,” KQ’s Chairman Michael Joseph.

    The recurring losses have raised questions about the current leadership of the airline. With some saying that the financial loses are tricks to help the airline chiefs to bargain for their full running of the JKIA operations.

    Kenya airways seems to have never bought affordable fuel. They complain every time of cost of fuel. Where do they get it?

    However, the New Symbolic route is still below the much expectations.

    Kenya airways has been forced to reduce was the number of its flights to New York from once per day to only five trips per week.

    Reports indicate that the route has only had 15,000 customers in a Year.

    “I do not consider it to be a lucrative route. There is nothing lucrative about flying to New York,” KQs CEO, Sebastian Mikosz says.

    Seems the new added routes have no much impact to KQs financial boost programs. They are adding more expenses to an already loss making company.

    Last year, KQ had added Mauritius, Libreville and Mogadishu to its destinations.

    They further included Rome and Geneva to its routes after signing the New York deal.

    Despite all this, the carrier expects to add two Boeing 787 Dreamliner planes back to its fleet later this year. The planes had been leased to Oman Air.

  • Urithi Adopts A Unique Model To Deliver Affordable Housing In Kenya

    Urithi Adopts A Unique Model To Deliver Affordable Housing In Kenya

    Since President Uhuru Kenyatta unveiled his Big Four Agenda during his inauguration to serve his second term in office, the different sectors that anchor his legacy have been making all necessary alignments to fit into the presidential vision which can only be achieved through collaboration between public and private sector players.

    One of the pillars of President Kenyatta’s legacy is affordable housing, with a target of 500,000 new housing units per year.

    Opinions and commentaries have been penned but what has stood out is the many experts who have made a strong case that the projected numbers can only be achieved if stakeholders would embrace the socio-economic model of housing provision.

    Legend supports this narrative yet fact is that it is not exclusively dependent on this model but that this will largely drive the realization of this pillar. So what is the socio-economic model of housing, how does it work and does any of the current players in property business operate on this model?

    The model is entirely dependent on members, whose contributions are key and vital in initiating and executing any project that seeks to provide housing, be it public or private. Upon payment of a pre-determined deposit or down payment, the balance of the cost is spread out and paid over a period of between 12 and 48 months.

    Samwel Maina, the Chairman of Urithi Housing Society, the only player that operates on this model, says monthly subscriptions vary from one member to the other depending on their economic ability.

    “For the project timelines to be achieved, also entirely depends on the speed of members to make their contributions. However, slow remittance by some members has contributed to delays being experienced as most times the society has to move with the speed of the slowest member in payment,” he says.

    “Speed is determined by how fast you get money from members. But due to the uncertainty and unpredictable nature of contributions and cash flows we adjust accordingly.”

    The pricing does not change over time “simply because the model mitigates on cost of labor, land and materials. Hence making it affordable without changing the initial price.”

    Being an off plan project, there are critical steps, approvals and mandatory procedures that must be undertaken. Market sounding is the first of the many steps and acts a notice of the intention to undertake the project.

    Then follows mobilization which entails recruiting members and other stakeholders, which process is followed by pursuit of statutory and other approvals by various government bodies, both national and county level.

    Once the necessary approvals have been granted, the groundbreaking marks the beginning of construction work, whose completion is entirely dependent on members’ fidelity to make subscriptions.

    “There are incidents where a member pays their subscriptions in full and expect that they would get their units but the principle here is that we pool together to own together.

    “The explanation is very simple. While you may have paid yours in full, the model works in such a way that those who pay upfront help kick-start the project and sustain it by making the first commitment which is key to property ownership and the subsequent subscriptions take us through to the tail end,” adds Mr. Maina.

    Urithi has over the past six years, completed and handed over thousands of housing units in Springviews in Thika, Plainsview in Juja, Gem1 in Witeithie and Lanet Homes (Nakuru and Juja).

    They intend to complete and hand over all housing projects currently under construction in the next 12 months. They include Utange – Mombasa, Gem2 and Rongai Homes which are set for completion in the next quarter for handing over to the members, while investors in the Osteen Terrace Gardens will be delivered by the last quarter of 2019.

    “The OTG project is the first-of-its-kind to enable us achieve affordable housing for our members and we are using the socio-economic model. This particular project [OTG] is very timely and it will hugely compliment the government’s efforts in attaining the big 4 agenda – the housing component, by engaging other stakeholders like us,” adds the Urithi boss.

    President Uhuru Kenyatta’s Big Four Agenda focuses on expanding the manufacturing sector, Universal Health Care, Food security and Affordable housing.

    Under the affordable housing pillar, the government through the National Housing Corporation and collaboration with private sector players, intends to construct 500,000 units annually by using innovative construction methods and low cost building and construction materials.

    “The government will achieve its dream fast if they partner with the saccos and cooperatives. Cooperatives and Saccos have structures, a wide geographical reach and most importantly members,” avers Mr. Maina, who believes affordable housing is a major milestone towards achieving the other three pillars of President Kenyatta’s legacy plan.

  • Airtel Kenya And Telkom Make Official Their Merger To Face Off Safaricom’s Dominance

    Airtel Kenya And Telkom Make Official Their Merger To Face Off Safaricom’s Dominance

    Telkom Kenya Limited and Airtel Networks Kenya Limited, today announced the signing of a binding agreement that will see the shareholders of the two companies enter into an agreement to merge their respective Mobile, Enterprise and Carrier Services businesses in Kenya to operate under a joint venture company to be named Airtel-Telkom.

    Telkom Kenya Limited’s real estate portfolio and specific government services will not form part of the combined entity. The final shareholding will be determined at the closing of the transaction. Telkom Kenya has the option of holding up to 49 per cent of that shareholding.

    The merged company will be chaired by Telkom Kenya Limited CEO, Mr. Mugo Kibati while Airtel Networks Kenya Chief Executive, Mr. Prasanta Sarma, will be appointed Chief Executive Officer.
    The finalisation and closure of the transaction is subject to approval by the relevant authorities.
    Airtel Networks Kenya Limited (Airtel Kenya) and Telkom Kenya Limited (Telkom Kenya) will see no immediate changes to their operations which will continue as usual.

    Similarly, there will also be no change to the current respective leadership and management, legal, organisational and staffing structures. Additionally, both brands: ‘Airtel’ and ‘Telkom’, as well as their respective products and solutions, will continue to co-exist. Similarly, service delivery to the respective companies’ customers as well as engagement with all business partners of both companies will continue to operate as usual.

    As per the agreement, both the partners will combine their operations in Kenya and establish an entity with enhanced scale and efficiency, larger distribution network and strategic brand presence, thereby enhancing the range and quality of products and service offerings in the market, and greater choice and convenience to the consumer.

    The combined entity will see sustained investments in networks to further accelerate roll out of future technologies. The Enterprise and Carrier Services businesses will get a boost with a larger fibre footprint and increased number of enterprise customers – including both large corporations and SMEs who would have access to a diverse portfolio of world-class solutions.

    Commenting on the agreement, National Treasury Cabinet Secretary, Mr. Henry Rotich said:
    “This move is well aligned with the government’s agenda to optimise the value of the assets that it holds in trust, on behalf of Kenyans, while cementing the country’s position not only as a regional business hub but also as an international investment magnet.”

    ICT Cabinet Secretary, Mr. Joe Mucheru commented: “ICTs remain a vital link to achieving Kenya’s economic goals and our national development agenda, particularly with respect to service delivery. Such mergers have had positive impact on the development of the sector and service levels to consumers in other markets. Similarly, we look forward to this merger leading to the introduction of new technologies and telecommunication products which will, in turn, support the growth of other business sectors of our economy, thereby spurring national production to meet the growing demand locally and beyond.”

  • RBA Gives Cytonn Investment The Nod To Manage Retirement Benefit Schemes Funds

    RBA Gives Cytonn Investment The Nod To Manage Retirement Benefit Schemes Funds

    Cytonn Asset Managers Ltd (CAML) says it has been registered and authorised by the Retirement Benefits Authority (RBA) to manage retirement benefit schemes funds.

    The Capital Markets Authority (CMA) also licensed CAML in March 2018. The Cytonn arm said it will “further grow its regulated products portfolio to include fund management services for retirement benefits schemes” following the nods.

    “Despite the retirement benefits assets under management growing to about Sh1.2 trillion as of June 2018, only 15 per cent of Kenyans belong to a registered pension scheme and there is a vast opportunity to increase this,” said Cytonn Asset Managers principal officer Maurice Oduor.

    “With this licence, we look forward to adding value to the retirement benefits industry by reaching more Kenyans and enabling them to save for their retirement and securing their future.”

    According to Zamara, a pension fund administrator, pension funds only earned 9% p.a in the last year. The entry of Cytonn into the pensions industry brings high yielding products earning upto 18% p.a into the industry.

    Cytonn Asset Managers earlier acquired Seriani Asset Managers Ltd.

  • With Sh2B Investment, Taaleri Set To Purchase 20 Per Cent Of Cytonn Real Estate Project

    With Sh2B Investment, Taaleri Set To Purchase 20 Per Cent Of Cytonn Real Estate Project

    On 8th November 2018, Cytonn held a client cocktail meeting at the Nairobi Serena Hotel. The forum served as a platform to enable Cytonn celebrate the ongoing successful partnership with Taaleri, its institutional investor, while also providing an opportunity for Cytonn clients to interact directly with The Cytonn Board and Taaleri.

    A section of attendees during the cocktail

    “This forum is meant to celebrate the great milestone we have had in our relationship with Taaleri. It will be a platform to get to know what we are doing as Cytonn, The Board and Taaleri as well as get to respond to any questions our clients may have around the firm’s governance,” said Edwin H. Dande, Cytonn’s CEO during the forum.

    Edwin H. Dande, Cytonn’s CEO

    “With the continued attractive investment opportunity in Kenya and the region, and the committed team at Cytonn, Taaleri has this year invested a further Kshs. 2bn in our Real Estate projects, and are now looking to purchase 20% of Cytonn during our IPO,” said Prof. Daniel M. Njiru, Cytonn’s Board Chairman and Vice Chancellor at Embu University, during the forum.

    Prof. Daniel M. Njiru, Cytonn Group’s Board Chairman

    He further said that, “The listing of Cytonn will only serve to increase our levels of governance, risk management, disclosure and transparency. As a Board, we are supporting Management on the listing, and would like to congratulate them for taking the firm to these heights.”

    Prof. Daniel M. Njiru also introduced members of the various Boards at Cytonn, which are The Cytonn Group Board, Cytonn Asset Managers Limited (CAML) Board, Cytonn Hospitality Board, the Special Purpose Vehicles (SPVs) Boards and The Cytonn Education Board.

    A representation of The Cytonn Group, Affiliates and Special Purpose Vehicles (SPVs) Boards

    Kati Salo, Taaleri Africa Team representative, reaffirmed the Cytonn – Taaleri partnership. “As a Risk Manager, I am confident about the risk position of the firm and I can sleep well knowing that my investments are in good hands,” she remarked.

    Prof. Daniel M. Njiru engaging with a client

    .

  • Bribery Scandal at Israeli Construction Giant Blows Cover Off Its Business Practices in Africa

    Bribery Scandal at Israeli Construction Giant Blows Cover Off Its Business Practices in Africa

    Police: ‘Picture arises of S&B systematically bribing gov’t officials with tens of millions of dollars for years’

    February 2016, Nairobi, ostensibly just another day at the office. Dan Shaham, manager of the Kenya branch of SBI Infrastructure, a member of the Shikun & Binui construction group, summoned accountant Shai Skaf to his office.

    Unusually, the blinds were closed, and on the desk was a file bound in red that Skaf hadn’t seen before.

    Shaham locked the door, praised Skaf for his work, implied that he had a bright future with SBI and told him it was time for him to “join the family”. Then he gave Skaf a top-secret mission: Compare the figures in the red file with other data, which he had to take home, not show the family, and keep under lock and key.

    The red file contained double books. In short order, Skaf realized he was looking at documentation of bribes to officials in east Africa, he claimed in his lawsuit against the company in 2017.

    Two days after that, Skaf says, he told his boss he wouldn’t cooperate, and was advised that he’s a spineless sissy. “When in Africa, be African. They all give and take bribes,” Shaham yelled at him, according to Skaf, and reportedly also said, “Why do you think profitability here runs at 40% and in Nigeria, 65% and in Israel, 4%?”

    Skaf claims to have confided in CPA Ruby Lazarov of the accounting firm of BDO Haft, SBI’s auditor, visiting the Nairobi branch. To his shock, says Skaf, Lazarov reportedly said that he’d known of these things for years and it’s the norm in S&B’s activity. According to Skaf, Lazarov specifically mentioned Nigeria, Uganda, Guatemala and in the past, the Ivory Coast, but added that the volumes of graft in Kenya were relatively minor.

    At some point unidentified parties began threatening his life, Skaf says – and in August 2016, he was beaten to within an inch of his life and threatened with a knife. The frightened accountant went back to Israel the next day. Lazarov was arrested in late February 2018 in connection with the alleged corruption.

    Most of S&B’s projects in Africa are governmental. Following an amendment of Israeli law that came into force in 2010, bribing foreign officials is just as illegal as bribing Israeli ones.

    Skaf claims Lazarov counseled him to look the other way and said it wasn’t a practice peculiar to East Africa but a “familiar, deeply-rooted practice backed by the company’s internal auditor, board audit committee, the company’s legal department and even reaching Ofer Kotler,” S&B’s former CEO.

    Kotler led the company from 2007 to 2015 and, with Lazarov, was also detained, as was S&B’s internal auditor, Abraham Admoni, and the CEO of S&B Switzerland, Rony Paluch. Ravit Barniv, who chaired S&B from 2007 to 2012, was questioned and sent to house arrest. Skaf claims to have warned Admoni and Paluch about graft, in vain.

    It seems at this stage to be one of the most egregious corruption cases involving a publicly-traded Israeli company. If not for the media swirl surrounding Netanyahu, the S&B case would probably have made front pages, especially as the company is controlled by billionaire Shari Arison, who also controls Bank Hapoalim.

    Shari Arison at the President's conference in 2011

    Shari Arison at the President’s conference in 2011.

    Police suspect that eight people, current and former executives at S&B, were involved in, or knew about, methodical bribery of government officials in several African countries to get infrastructure projects.

    “I’m not surprised it reached the levels of Barniv and Kotler,” said an equity analyst who knows the company. “Solel Boneh Overseas (Engineering Services) is the most substantial, profitable company in the S&B group. Profitability in Africa, particularly in Nigeria, is phenomenal. For years when asked, company managers would explain that Africa involves higher risk, but obviously that can’t explain the huge profits. The issue of ties in government always floated there in the background. The 2016 financial statement relates that infrastructure activity in Nigeria stopped because of a change in government, and the new government was halting payments to contractors. Somebody who knows the company joked that it was simply taking time to obtain the private bank account numbers of the new rulers.”

    Solel Boneh began working in Africa in the 1960s, a time when Israeli companies were starting to work on the continent with the encouragement of the Israeli government. Then Solel Boneh was controlled by the Histadrut labor federation.

    In the last 20 years, SBI projects in Africa have usually been sponsored by the World Bank and various UN bodies. The contract is made with the state but the international institutions are the ones that in practice transfer the money from the government to the company. At least part of the current affair, it seems, stems from the World Bank’s discomfort with S&B’s behavior. That is implied in a statement S&B made to the Tel Aviv Stock Exchange when the affair broke out. It reported that the World Bank was probing S&B’s projects in Kenya.

    After Skaf’s lawsuit arrived, S&B and its Swiss subsidiary, through attorney Pini Rubin of Gornitzky & Co., which is close to Shari Arison, tapped the European Institute of Certified Public Accountants to conduct an internal investigation.

    Strange as it may sound, S&B wants to shake off the Israeli connection to the affair, and as far as the parent company is concerned, it shouldn’t have been investigated by the authorities in Israel, despite the anti-graft law. That version suggests that if there was corruption, it is a Kenyan-Swiss affair and the people involved are not Israeli residents, but former Israelis.

    “It’s a separate company with a separate board, most of which is Swiss,” says a source near S&B.

    “There are Israeli names but they aren’t actually Israelis, they’ve been living abroad for years. The company in Switzerland is materially a foreign company. It operates in Africa and its management and control aren’t in Israel. It doesn’t matter if its profits ultimately reach Israel. What, could a company that receives the profits upstream be a partner in crime, if, heaven forbid, any was committed?”

    Clearly, Israeli authorities think otherwise. On February 20, Amit Michles, the detentions judge presiding in Rishon Letzion, referred to the World Bank probe (from confidential information for his eyes only) was known. The police representative at the hearing told the court that the affair concerns the years 2008 to 2012 but now there is new evidence regarding the present.

    Two days later at a remand hearing for additional suspects, the police representative said, “A miserable picture arises of S&B systematically bribing government officials with tens of millions of dollars for years, and more, around the world, all to increase its profits. In some cases S&B defrauded banking institutions affiliated with the UN, institutions established for noble purposes such as developing infrastructure in developing countries. If the suspicions turn out to be true, the damage caused to the State of Israel’s image will be hard to estimate.”

    ‘The bastards changed the rules’

    All the suspects vehemently deny the allegations. But some may yet argue that, as Shaham allegedly told Skaf, “that’s how things have always worked in Africa.” Indeed, at a remand extension hearing of Yehuda Elimelech, who managed Solel Boneh Overseas until 2011, his lawyer hinted that until 2010, there had been a certain culture to S&B’s operations in Africa. When the graft law was enacted in 2010, Yehuda asked for a legal opinion about it out of a genuine desire to instill the new norms, she said. Michles answered that the evidence does not support that claim.

    Many Israeli companies operate in the third world and traditionally the government ignored the culture of corruption there. But that’s been changing; note the charges against mining magnate Beny Steinmetz regarding alleged graft in Guinea.

    “This is a case of ‘the bastards changed the rules,’” says an executive in infrastructure who knows S&B. “Once, bribery was the standard, the norm. But now these countries want to be part of the normal world, and the international institutions, the UN and World Bank, are keeping closer watch.”

    We tried talking with past and present directors at S&B, and the few who would talk, off record, claimed to have known nothing about graft in Africa.

    Shari Arison’s public-relations machine paints S&B as a company that does operate for profit but has green and ethical values. The fact is that most of the company’s profits stem from the third world. S&B’s EBITDA for 2016 totaled 606 million shekels, of which Africa contributed 65%.

    Market sources suspect the affair could hurt the company, especially given the high proportion of its profit stemming from Africa, which implies that it will have to change strategy. The company’s stock has fallen over 20% since the story broke out, reducing its market cap to 2.6 billion shekels. It could fall more if only because of the uncertainty, says an equity analyst. He doesn’t see the company quitting Africa, noting that it has projects in process; but it will have to rethink its strategy for the third world in general.

    The Arison Group commented: “As published, S&B is fully cooperating with the investigation and hopes it ends soon on a positive note, as the company has zero tolerance for improper conduct. The group does and will operate to instill high standards of values in everything it does and in every area of its investments. We hope the group’s 27,000 workers and managers in Israel and around the world will continue to work with added value for the economy, society and the environment.”

    S&B commented that the claims arise from a lawsuit by one former worker of a foreign group company operating partly in Africa and following that, the company itself contacted European enforcement agencies (where the company resides) and is conducting its own investigation. It added that its companies have always operated by a strict ethical code based on leading international standards and has no tolerance for improper conduct. The company said it could not comment on the claims raised by the police and in the article because of the investigation in process.

    Ormat Technologies

    Immediately prior to their work at Ormat, several senior Ormat executives and directors worked at Shikun & Binui, a leading Israeli construction company. Shikun & Binui was recently charged by Israeli prosecutors with bribing officials in what are now two of Ormat’s key markets, Kenya and Guatemala.

    Ormat’s General Counsel & Chief Compliance Officer, along with an Ormat director, are under pre-indictment in Israel. This is a formal stage of prosecution just prior to indictment. Ormat has apparently chosen not to disclose that the two are currently in the midst of a criminal prosecution. Both still serve in senior oversight roles at Ormat.

    Ormat CEO Doron Blachar’s immediate prior work experience was serving as CFO at Shikun & Binui. The CEO during Blachar’s entire tenure at Shikun & Binui was arrested in 2018 over the above referenced bribery allegations. It is unclear whether Blachar faces eventual risk of indictment as well.

  • Cytonn Opens Doors To The Public As They Unveil The Ridge Show House

    Cytonn Opens Doors To The Public As They Unveil The Ridge Show House

    If you are looking for something to do this weekend, CytonnInvestments is holding an open day on Saturday for clients and members of the public on site at The Ridge.

    The show house for the project will be unveiled, giving guests a preview of what the finished product will be like. Visitors get to sample the distinct and magnificent lifestyle development and ask the management questions on any issues about Cytonn’s activities.

    The event will run from 12 noon to 4 pm, so that clients have enough time to explore the site, view the show house, and interact with the management of Cytonn.

    The Ridge.

    Alongside the open day, the company is offering a 5% discount for early buyers, which will run for a limited time. Interested guests are advised to sign up and reserve their slots before spaces run out.

    This project was made for people who want to live in luxury and style, at surprisingly affordable rates. The list of amenities goes on and on, but I think the best part about it is the location. Imagine living just a few minutes from Windsor Golf Club, Two Rivers Mall, UNEP headquarters, and only 10 km from town!

    The luxury project will have 1,2,3 & 3 bedroom apartments withdomestic servants’ quarters (DSQ).

    Just a few months ago, Cytonn handed over the Amara in Karen, another of its projects, which is currently 100% complete and sold, proving they have what it takes to deliver beautiful, exclusive homes that perceptive Kenyans can enjoy.

    If you want to buy a home or to invest, this is your opportunity! You cannot afford to miss out. RSVP here.