Safaricom: Say What?
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I was breezing through the standard’s business section and I came upon this article on Safaricom. It made no sense to me. So, I’m asking you (anyone) to read it and tell us what on earth the author of the article was trying to say.
The article begins like this:
“Finance minister Mr Amos Kimunya says the Government will spend Sh38 billion to ‘buy’ the stake of Safaricom held by Telkom Kenya”….(read more here: Ati nini?).
Isn’t Telkom Kenya owned by the government? and if it is, then how can the government buy what it already owns?
well… i agree with you, ati they spend 38 billion so that they can raise 35 billion???
because they are different entities…..and even the Government cannot do business kienyeji………..
Its strange they budgeted for it, given it will be money going out and then coming back thru the issue. In strict accounting speak, its the correct way to do it though, but then they should have put it alongside the receipts they are expecting from privitisations.
This is what I don’t get.
If both entities are partially owned by the government does it matter where the money comes from as long as it ends up in the treasury?? I know they’re different entities, but the end-point should be the same (i.e. it’ll wind up in the treasury and be dispersed from there). I guess I still don’t get it.
I also get a queasy feeling reading about the governments involvement in all these “private” companies. They should follow the American business model and just stay out of private businesses.
MainaT:
Why are accounting rules so complicated? I always thought it was because companies were looking for loopholes to avoid paying taxes, but people are just going crazy with it. I mean, at the end of the day isn’t business about counting your profits (money in) vs. your losses (money out)???
In perfect world Kimunya would have netted off the whole thing i.e. money paid to Kenya Tel and money raised from NSE. Guys would then have been asking him how come he didn’t mention the Safaricom IPO.