Sh1.67b Safaricom refunds pending

August 18, 2008
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, NAIROBI, August 18 – More than one billion shillings worth of refunds from the Safaricom Initial Public Offer (IPO) is yet to be paid back to investors who had participated in the exercise three months ago.

The Central Bank of Kenya (CBK) and Capital Market Authority (CMA) announced Monday that 42,910 cheques worth Sh1.67 billion have not been presented to the lead receiving bank for clearance.

In a statement CBK Governor Professor Njuguna Ndung’u and CMA Chief Executive Officer Stella Kilonzo said the remaining refunds represent nine percent of the total refund amount of Sh92 billion.

The total number of cheques issued was 496,710.

They however admitted that they were still facing challenges in issuing refunds to regional and diaspora investors but added that they were making arrangements to facilitate the process.

Previously, arrangements had been made with the receiving bank, Citibank, to issue investors with foreign currency cheques or for the funds to be transferred electronically to their overseas accounts.

However, this method was prone to exchange rate risk.

The statement said an agreement had now been reached with the receiving bank to draw a global refund cheque, which would be made to the brokers for investors residing outside Kenya.

Investors will be required to formally instruct the brokers to return the cheques in the investors’ names to the receiving bank in exchange for a cheque in the name of the selling agent mandating the agent to collect the refund on the investor’s behalf.

The agent should then provide to the CMA a detailed breakdown of each cheque, a confirmation of the identity of the beneficiary and the investor’s written instructions authorising the reinvestment of the IPO or crediting of their securities’ account with the authorised selling agent.

The officials said investors wishing to use this facility should write to their brokers who will then be required to liaise with the receiving bank for issuance of the global refund.

They also pledged to monitor the process to ensure that any bottlenecks were promptly addressed.

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