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Kenya: Safaricom Investors Still Waiting for Refunds a Month Later
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Business Daily (Nairobi)
16 July 2008
Posted to the web 16 July 2008
Dennis Odunga
Over a month after the results of the Safaricom Initial Public Offering (IPO) were unveiled, some investors have not received their refunds.
In Eldoret, some investors are still waiting for refunds from various stock brokers' to invest the money elsewhere. They say that some of the brokers are reluctant to refund their money.
"They are taking us through a hide and seek game. They refer us to banks which say no transfers were made to our accounts," said their spokesman Benjamin Koko.
He had applied for shares worth Sh50,000 only to receive 2,200 shares, the equivalent of Sh11,000 at the issue price of Sh5 per share. The shares reached a high of Sh8 at the Nairobi Stock Exchange and are now trading at Sh6.80 cents.
Mr Koko said some investors were still struggling to repay loans from various banks and other financial institutions and the delay had worsened the situation.
Some especially those who depended on business are unable to repay their loans due to the post-election violence that affected their operations. "The brokers should process the refunds before interests charges raises the advances to unmanageable levels," he said.
The investors appealed to the government to intervene and ensure that the refunds are processed. "Getting the refunds has become a nightmare. Projects are on hold and expenses in pursuing the refunds are rising," said Mr Charles Sudi from Turbo.
The selling agents issuing the cheques have maintained that the delay was because they must ensure there was sufficient proof from the investors before payment.
The Safaricom IPO attracted the highest number of prospective buyers- 860,000 in Kenya's IPO history. The 10 billion shares that were put on sale were oversubscribed by a massive 453 per cent forcing a reduction in the number of minimum shares allocated to individual applicants.
Retail investors got only 21 per cent of their application with those who applied for the minimum 2,000 shares getting 420 shares.
The investors said retail investors should be given priority during the allocation of shares.
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"It's not fair to treat equally a peasant farmer who has struggled to raise some money for the shares with a millionaire who is already leading a luxurious life," said Mr Sudi.
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