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Wednesday, July 18, 2007

Can you smell a rat? (Kenya Re OFS)

It is a foregone conclusion (unless something drastic happens) that the KenRe OFS (not IPO folks... even if the Business Daily calls it that but Business Journalism in Kenya is a whole new animal...) will be successful...

Nevertheless, the deception by the GOK is not a good sign of things to come... The GOK knew that Mumias 1H 2006-7 was relatively poor but they hid that crucial information until AFTER the OFS was over. The share price plunged to around 25/- in the aftermath.

So there is a forensic report that is being "hidden" from the public... WHY?

Kimunya claims that a copy was given to the Transaction Advisers but we are buying the shares. Shouldn't we know about the shenanigans?

From the Business Daily 19 July 2007: Mr Kimunya, however, maintained that the report had been given to all transaction advisors who had used its insights to structure the deal. “I am assured that necessary accounting provisions and adjustments have been made in the Reporting Accountants’ Report,” said the minister.

Why haven't the criminal suits against the crooks (ex-CEO & CFO) been fast-tracked since this is important to the confidence in the firm?

My advice is to wait till the last moment before purchasing shares in the OFS.

1 comment:

Anonymous said...

I agree with you, Kenya Re is just another fraud. Check this out:
1. The forensic audit was never availed even to the advisors(Kimunya actually lied when he said that the advisors had access to it).
2. There is no discount here, Kenya Re's P/E is 15, the insurance average P/E for listed companies is 13.( Of course they will quote a lower offer price so that idiotic wananchi would think its 'cheap')
3. Why didnt the audit go back at least 5 years, since the NSE listing requires at least 5 years of profitability(Maybe they did not do that because they are hiding losses that would have disqualified it from listing this year).
4. The employees have managed to blackmail the management into retaining them even though retrenchment is overdue.(They must have something on them to warant such drastic change of tact)
5. Just look at the prospectus. Everyone involved is trying to cover their asses in case Kenya Re pulls a ka Uchumi. D&B does advisiong and then comes out with a scathing anaylsis. Ditto Pricewaterhouse.

And I cannot believe that you guys are falling for this fraud.