NAIROBI, July 21- The receiving banks of the Safaricom IPO are expected to meet with the Stockbrokerage fraternity on Wednesday to address issues that are still pending in the refunds exercise.
This follows reports that some investors have still not received their refunds five weeks after the refund exercise started.
Faida Investment Managing Director Bob Karina told Capital Business News that the meeting would seek to resolve the myriad of problems ranging from the under allotment of shares to the double payments of the refunds that are still being experienced by the brokers owing to the magnitude of the transaction.
The issue attracted over 800,000 new investors into the bourse.
This situation has further delayed the disbursement of the refunds to investors.
Responding to claims that some brokers were asking for money before they process the refund cheques, Karina said such a provision was not included in the Information Memorandum (IM) and the issue should therefore not arise.
It has emerged that in cases where clients’ cheques are missing, some brokerage firms are drawing up the cheques from their accounts with the hope of repaying themselves when they get the cheques.
Suntra Investment Managing Director James Murigu says unlike in previous transactions where brokers used to endorse the cheques and bank them, the agents do not have that privilege and this has somewhat contributed to the delays.
Asked why some firms had been able to clear their backlog, Murigu, whose firm is one of the brokers that haven’t refunded all cheques, argued that some of them had few clients while others had predominantly Nairobi-based clients.
“The people in Nairobi were able to pick their cheques within the first days unlike their rural counterparts who have had to travel from up country,” he explained.
He said they are liaising with the lead receiving bank, Citibank to address some isolated issues where some clients were not allocated any shares.
“We want every client to get their shares and trade in the market and that is why we are having the meeting on Wednesday to review the problems and move on,” he said.
In late June, the government had regretted the delays but added that the problems provided them with the opportunity to learn from their mistakes and effectively plan for the next offer.
The delays have been also blamed on a communication breakdown between government, advisers and the public and the tedious process of verifying the authenticity of the people presenting the cheques for payment.
Although Citibank could not be reached to verify the exact amount that has been refunded, it is estimated that only about a small percentage of the Sh130 billion is yet to be paid out.