The Board of the Safaricom has been reshuffled following the departure of “super-chairman” John Ngumi, barely 6 months after he took over from Michael Joseph, another semi-permanent fixture in Kenya’s corporate landscape.
Ngumi has been replaced by high-flying lawyer Adil Khawaja, who looks set to be chosen to Chair the Safaricom Board for the foreseeable future.
Safaricom, and by extension its M-Pesa subsidiary have been rocked with claims of impropriety from within, in the recent past, both based either on insider collusion to defraud the public or circumvent procurement protocols, or other equally egregious financial scams involving senior staff.
For example, the country has been inundated with revelations of a massive hostile takeover of the Sportpesa brand and property by members of the Kenyatta family on one hand and junior shareholders of the original holding company (Pevans EA Ltd) and surreptitiously handed it over to another company by the name Milestone Gaming Ltd.
The conspiracy was so asinine that it involved corrupting the Registrar of Trademarks, the Chairman, and CEO of the Betting Control and Licensing Board (BCLB), various senior members of the Judiciary including a judge in the court of appeal and ultimately, the CEO of M-Pesa, Sitoyo Lopokoyit.
Elsewhere, Safaricom was the weak link in the robbery and transfer of the Fuliza concept of limited overdrafts on mobile money platforms, the biggest of which is Safaricom’s M-Pesa.
Tens of millions of Kenyans today utilize Fuliza, which is a partnership between the Kenyatta family-owned NCBA Bank and Safaricom, which allows a subscriber to overdraw on his mobile money wallet up to a predetermined limit.
Any subsequent deposits into that mobile wallet will automatically defray the overdraft and repay the crazy interest and other charges by both Safaricom and NCBA.
The Kenyatta’s first heard about this dream idea from the irascible and highly excitable Tony “Flash” Gichuru, the diminutive and media-shy husband to former news anchor Julie Gichuru.
The system had been designed and built by Eddie Ndichu, a top fintech executive and one-half of Kenya’s les enfants terrible, with his identical twin Paul.
Why would Tony be so indiscreet as to inform Muhoho Kenyatta, younger brother to former President Uhuru Kenyatta, that Eddie has come up with this novel concept and pitched it to Safaricom/M-Pesa executives, and that the system would be run by KCB and Safaricom.
Those pesky Kenyatta’s managed to compromise the guys at Safaricom and swing the pitch (what eventually became known as Fuliza) their way and to be run exclusively by their bank.
The departure of Ngumi represents the washing away of the stench of the immediate former National political dispensation, which apparently did not see anything wrong with having a single individual hold onto multiple corporate chairmanships of key Boards.
At one time, both Michael Joseph and John Ngumi held overlapping Chairmanships of top Kenyan corporate boards like Safaricom and Kenya Airways, Base titanium and Kenya Pipeline.
Is there such a dearth of corporate experience and management talent in this country, or was this the old boys club dishing out largesse to its membership?
Given Khawaja’s corporate profile, it is difficult to see how the main shareholders of Safaricom (Government & Vodafone) would be opposed to his ascension to the aforementioned Chairmanship.
Adil is currently the managing partner at Dentons Harrison Hamilton & Mathews, one of the oldest and most prestigious law firms in Kenya, having opened its doors in 1902.
To give you an indication of who Dentons really are, they are one of the World’s largest polycentric law firms with in excess of 20000 people in over 80 countries.
Therefore, the law firm previously known simply as HHM is now part of a massive network of the top law firms around the World, which is able to offer global legal solutions to a multiplicity of Kenyans, who are now part of the rapidly interconnected business World.
Adil Khawaja therefore sits at the top of the legal food chain in Kenya.
Previously, Adil had been a Director of KCB Group until 2020, and also the Chairman of KCB Kenya Ltd, the local franchise and also the largest, within the KCB Group stable.
In closed circles, it is rumored that the removal of Adil from KCB Board was part of the onslaught on the bank, following the acrimonious merger of CBA and NIC (which made the NCBA the 3rd largest bank by assets) and the general plan to either reduce KCB’s dominance or slow down its impressive growth.
Adil was therefore fought because he was not a part of the old boys’ network and we eventually saw another casualty of the boardroom onslaught in the departure of the high performing CEO Joshua Oigara.
Safaricom is the common denominator for all these platforms and it will be interesting to see what becomes of the Hustler Fund, which is angling for the same dominance as Fuliza, now that Adil occupies the Safaricom Board Chairmanship.
The Hustler fund is the loans’ solution fronted and promoted by the new KK Government, to offer small loans to millions of Kenyans at low interest rates.
Needless to say, the appointment is a breath of fresh air for the majority of Kenyans, seeing an educated and capable Kenyan, of Indian origin no less, getting a shot at the helm of the biggest regional company.
To say that Khawaja has his work cut out for him would be an understatement.
He will find a system that has morphed from 20 years manufacture by the fires of corruption, all the way since the days of a shadowy company by the name Mobitelea held a substantial number of shares in the company, and whose ownership was so contentious that the UK’s Serious Fraud Office (SFO) had to approach Vodafone to ask that its veil of incorporation be lifted.
Clearly, Khawaja will need to deal with Sitoyo Lopokoyit, who appears to be untouchable and politically invulnerable, mainly because he comes from a community that seems aligned with the current political dispensation on the one hand and the rumor that he has made so much money in the last couple of years that removing him from position of CEO at M-Pesa would barely dent him financially.
The issue of the SportPesa heist and/or hostile takeover cannot be swept under the carpet, and could use his ADR skills to sort out conclusively.
Both Safaricom and Vodafone cannot be seen to have been complicit in this modern day corporate piracy.
Khawaja will need to deal with the aloofness and standoffishness of Safaricom, with the question of why such a behemoth, which is owned substantially by Kenyans directly and Kenyans through the Government, feels that it will not support popular youth initiatives… for instance sports.
When Safaricom ventured into sports sponsorships a few years ago, it created a joke of a football competition like the Safaricom Chapa Dimba, which was simply a conduit to “eat” by its own officers and friends in the Football Federation.
No index could justify the funds expended in this bogus football tournament and the lack of a verifiable ROI.
In Rugby, the late Bob Collymore high-tailed out of its sponsorship just because of the belligerence of a few mendicants, who we now realize were personally in serious need of these resources, despite their misplaced arrogance.
Since the arrival of Peter Ndegwa at the helm of Safaricom, the employees appear to have gone off the reservation. They have become a power unto themselves.
Will Khawaja be in a position to rein in these cartels at the region’s biggest and most profitable company?
He really has no choice, it is his stellar reputation on the line this time.
