NAIROBI, Kenya, Nov 29 – The government has been urged to enforce mechanisms that will ensure that more Kenyan investors purchase their shares electronically in future Initial Public Offerings (IPOs) and similar transactions.
Ade Ayeyemi, the outgoing Managing Director of Citibank which was the receiving bank in the 2008 Safaricom IPO, said the need to encourage more online participation in such transactions is one of the lessons learnt from the largest issue in sub- Saharan Africa.
"I was not happy that there were Kenyans who were queuing in the rain and in the sun with the intention of participating in the IPO. Next time, we need to make sure that we get more people to do it online or through their cooperatives," he said.
Although it was the first time that registration was conducted electronically, the Safaricom issue was characterised by long queues in brokerage firms, a phenomenon that was attributed to investors\’ lack of confidence in the electronic system.
The IPO refund process was also marred by delays that saw Citibank heavily criticised for holding investor funds amounting to billions of shillings.
Citibank however defended itself citing inadequate refund infrastructure that could not handle the repayments amounting to Sh141 billion. For this reason, Mr Ayeyemi said more investments need to be made to ensure an effective and efficient refund process in subsequent issues.
Nearly two-and-a-half years after the IPO, he said they were still holding 3,000 investor cheques amounting to Sh141 million as requested by the government.
Instead of focusing on the challenges that were experienced in the IPO refund, Mr Ayeyemi who\’ll best be remembered for his role in the IPO said the issue provided all stakeholders with the opportunity to learn from their mistakes and effectively plan for the next offer.
"The country was a pioneer because this had never been done before, it was a challenge to do it and the environment was even tougher at the time (the country was still reeling from the effects of the post election violence) so I think Kenya deserves a lot of gratitude because for the first time, the banking sector was able to agree on a fixed interest rate and it did not go up," the outgoing CEO added.
He spoke during a press briefing where the bank announced the appointment of Dan Connelly as the new MD for Citibank Kenya and the East African operations.
Mr Connelly said he would continue to execute the same strategy that the bank had adopted of focusing on the corporate sector.
"We will continue on the path that has been set. We are focused in the clients we serve, the segment that we target and I don\’t see any major change to that," the American national said.
However, the bank indicated its intention to exploit the newly introduced agency banking model and the mobile banking to reach more customers and grow its business.
Citibank Kenya which is the head office of Citibank East Africa that covers Kenya, Tanzania, Uganda and Zambia serves the corporate market and currently has two branches in Nairobi and Mombasa.