Don’t Get High On Your Own Supply
I was attempting to read this story in BD Africa about new rules that are going to affect the ownership of some of these investment banks and quite frankly, it didn’t make sense to me. Essentially, the government has decided to limit the ownership of these banks to 25% each per individual (family?). However, an unamed source in the article is quoted saying that the rule can be easily skirted if:
…..”even though the law defines in great detail that a “beneficial owner,” is not supposed to have a shareholding or controlling interest of more than 25 per cent, some players argue that brokers could skirt the new law by installing ‘proxies’ as minority shareholders. You just need to give out portions to your family members, relatives or trusted friends and you will be in compliance with the rules”…
Who told Kimunya that limiting ownership in entreprenurial ventures was going to control these cases of fraud? It makes absolutely no sense to me because if I start a company and use my own money to do it and if I build up that company with my own sweat and equity, I should be able to control 100% of it if I so wish. The government should not be dictating how much of an ownership stake private entrepreneurs should hold! However, this new rule will still not resolve the underlying problem of a weak rule of law system that exists throughout the country.
I have said on numerous occasions that businesses do not operate in a vacuum. They function within certain environments and if that environment is defined by a corrupt system, then the government, who is the biggest corrupter of all, should not be surprised when business begin to reflect this lawlessness.
This is a classic case of a pot calling the kettle black. The government, the biggest thief of all, is asking the brokers (another bunch of thieves) to obey the law! Does this make sense?
Until there is a recognition in that entire country, that corruption and other white collar crimes, will not be tolerated, nothing is really going to change.
** on another note — the former CEO of Lehman brothers is doing the same thing as Stanley O’Neal (the former head of Merrill Lynch) — Fuld (the CEO) just sold his $13 million dollar house to his wife, for a whopping $10 dollars. He’s trying to hide his attempts in preparation for the investor lawsuits that are coming his way.
The reason I am mentioning these cases is to show that corruption does occur in many places, but in the west, if you get caught, you will pay for it eventually. i.e. the law will catch up with you.
People need to start getting business advice from rappers like the notorious B.I.G (R.I.P): Didn’t he warn niggers not to get high on their own supply? i.e. don’t snort the coke your selling because that’s just throwing your own moolah down the drain.
Sample:
I been in this game for years, it made me a animal
It’s rules to this shit, I wrote me a manual…
A step by step booklet for you to get
your game on track, not your wig pushed back…
Rule nombre uno:
never let no one know
how much, dough you hold, cause you know
The cheddar breed jealousy ‘specially
if that man fucked up, get your ass stuck up
This part is for the commercial bankers who were realized how much money the brokers were making in commissions, so they made sure these brokers got their “asses stuck up“. (you better gimme some of that ownership bro).
Number two:
never let em know your next move
Don’t you know Bad Boys move in silence or violence
Take it from your highness (uh-huh)
The bad boy here is the government. They’ll use violence if you refuse to give up the money.
Number six:
that god damn credit, dead it
You think a crackhead payin you back, shit forget it
This is for the poor investors whose money has been eaten up by a bunch of crackheads (read: brokers like nyagah and francis thuo).
Follow these rules you’ll have mad bread to break up
If not, twenty-four years, on the wake up
Full lyrics here: The Ten crack commandments
Na hiyo ni maendeleo….
Mbaru, Murigu and Wangunyu all worked with banks which either collapsed or bailed out as managers. You recall Rural -Urban Credit , Kenya Finance Bank and National Bank of Kenya.
Look up all stock broking firms MDs -they are former bankers in ailing or collapsed banks. Why didn’t CMA conduct a FIT AND PROPER test to these guys when they were applying for licenses in 1996?
Almost all these investment banks that upgraded to Investment Banks are shams. The good one are subsidaries of Multinational Insurance Companies and Banks (Mainly from South Africa). Sadly ,their top managers are Kenyans and it is a matter of time….?
Kestrel had its share of problems when Biwott’s son in law (Field Marham) was MD.I think he was thrown out of the board. They have a very focused MD (Andrew de Simone) currently.
African Investmet Banks (Peterson Mwangi) is also very focused (targeting high-net worth clients only) although I think he also had a scandal in one of the unit trusts.
The danger we have is that rogue employees are jumping from one licensee to the other. Guys like Bob Ashley, and other I wont name should be in jail.
Annonymous…
Gud stuff .. You are really resourceful .. How come you know all this stuff about Kenya big players …. Tell us more man… Give us the names ?
I read a little bit about Feild Marsham … He’s pretty heavy in the business game in Kenya … I also read about his KENSAP project to fund students to the united states … That sounds like some good project … I never knew stuff like that existed in Kenya by a private group ….
http://kensap.org/index.php?op.....p;Itemid=2
you can also read here about Field Marsham ..
http://www.charlesfield-marsham.com/
KE…
I think regulations are an ongoing process and should never stop at any time … Especially in the Financial Industry …. We always need checks to avoid a problem building up to unmanageable levels…
I read the article ‘new rules’ and it seems to me to be a knee jerk type of approach …. I mean honestly the Central Bank cant watch these people …. We need another department that will watch and monitor the peoples money and fraud in the stock exchange…. This department Should have the tools necessary to Investigate what the daily transactions in the NSE …
We also need another accounting department to monitor the accounts of all the publicly traded companies …. Since from what ANON has said … If all these former Bank crooks are getting in the NSE they must be using some creative accounting to lie to innocent Kenyans ….. We need full disclosure of a companies standing and not some kumbayah….
I also agree with ANON that all past Bank crooks should be announced on Public Television and people should now who these people are …. What these rotten oranges are going to do is to make the basket stink … and this makes the people lose trust in their institutions..
KE,
B.i.g was really deep man …. Whatever happened to real hip hop ? … I don’t know…
Well there is no way to return Investor confidence like in the 1960′s and Early 1970′s in Kenya Unless the we have a small and working government that pays taxes …. And a civil service that is efficient and working…. By this I mean Zero Grand Corruption AND return of rule of Law and ……..
If this is achieved then Investor confidence can be achieved… but if this is not achieved then we’ll continue swimming in the Murky filth that the government finds itself in …
Many countries in South Asia were in the same footing like Us … There is nothing new in what they’re doing …. They solved their political problems but we did not… So we still lack behind….
Ten crack comm… what?@@##$!
Notorious B.I.G, Tupac et al… These dimwitted people glorified crime and behaviour that reinforces stereotypes and retrogresses communities of African origin.
Not so long ago, being of African origin is synonymous with “bad credit”.
As much as I enjoy HIP-HOP & RAP for its artistic rendering, I deplore the negativity that has held down African americans – promoting ignorance, violence, dividing them and preventing their economic and social empowerment.
Screw Biggie. Screw 2pac. Screw Snoop, Dre and all the self proclaimed thugs. Their dumb short-sighted Era is gone.
Doesnt matter your point.. Biggie’s drug peddler lyrics are NOT a source of wisdom and Africans (esp Kenyans) do not identify with such nonsense.
Obama is president. Next rappers should be rapping about how to get to the white house!
KE,
I have come to the conclusion that kenya is ANIMAL FARM In reality. Some people are more equal than others, the elite overlook the majority of peasants who put them in power, many go hungry while the elite leaders get fatter each day.
There’s no opposition, just a GRAND Coalition to guarantee GRAND CORRUPTION.
Kibaki is literally USELESS!! and I was an adamant kibaki supporter, Raila, no differnt, his hands are so dirty with corruption money from the grain handlers in mombasa, no wonder he does not need a salary!
honestly, where is kenya headed ? I do not see any viable replacement/ leader in 2012…
mbaru was the owner of Jimba Credit…
Be careful people, “KE” is a very smart and apparently cunning dude. From the trend, I think he has a bigger task than just bloging… dont fall for his trap.
Riaga:
Huh? say what?
I think you are overstating the roll of this very minor blog. It’s just commentary; nothing more, nothing less.
I don’t know who wrote that …
But … I understand what you mean .. I can have my own blog .. but I really don’t have time to do all this … Anyway good luck buddy…
Kimunya’s reasoning at that time was Brokers where one could not separate management and ownership were mostly likely to go under.
But for me, its a simple case of lack of controls. The other day,Business Daily highlighted how some brokerage houses had lost millions through fraudulent activities by agents and low cadre employees.
what the industry requires is to have a benchmark of the minimum control to be put in place. Ownership should be the last resort.
Concept:
I’m not sure I follow what you are saying. What do you mean by separating management from ownership?
Coldtusker:
What happened to Jimba credit?
Jimba Credit – The same path as Rural Urban… it closed up shop coz it was broke. The firm was taken over by the government & merged into Consolidated Bank…
KPLC among other firms are now ‘shareholders’ of Consolidated Bank courtesy of Jimnah & friends… of course, the reason KPLC had money in these shady firms/banks was coz of political connections!