Western Union money transfer to dominate Posta Pay

When Posta Pay was launched last year as a cheap fast money transfer service of the Postal Corporation of Kenya, few people thought that Western Union money transfer would hold out, especially for money transfers within the borders of Kenya.

Months after the launch of the service, it seems that Western Union has managed to hold its own pretty well.

Wishing to establish the reasons for this, I went to GPO last Saturday, the head quarters of Posta Kenya in Nairobi, to send some money to a friend in the coast region.

There were only two counters, and there was a long queue of people waiting to send or receive money.

In spite of notices indicating that one counter was for sending and another for receiving, this procedure was not followed, all persons queued on one line, and went to each counter as and when it became available.

The customers were furious. It took an average of 45 minutes for me to get to the counter. The counters were moving far too slowly.

A manager was hovering behind the counters, not listening to customer complaints.

If this was a private institution, the manager would probably have knucked down to open a fresh counter, and serve more customers, in order that Posta makes more money from commissions...alas, this never seems to feature in the minds of most Government or quasi-Government institutions..and Posta is a glaring example of that.

To add insult to injury, the watchman from a non-familiar security company, kept hovering and glaring at the customers, exchanging rude insults with them, refusing to call a manager to address the customers saying that was not his job, even threating to physically square it outside after hours with a particularly infuriated customer.... this was particularly disastrous on the calibre of security personnel hired by Posta.

There was no TV, no water to drink, no seats to rest nearby...a terrible experience.

The Post office was then closed at 12noon or thereabouts.

I decided to go for an early lunch until 2pm when i sauntered over to Western Union at Nation Building.

There were 3 counters, all open (they are even open on Sunday), there was no queue (there were comfortable seats and mineral water to quench your thirst while watching TV or reading the provided newspaper).

The watchman from a well known security company was very discplined, sat well away from the customers, the attendants at the counters were very friendly indeed, and the transaction was concluded expeditiously.

It is therefore no surprise that I (and many customers) shall always go to Western Union money transfer in spite of their slightly higher charges....Posta Pay has left a very bitter taste in my mouth !

The Massive Risks & Gaping Loopholes that are driving investors off the Nairobi Stock Exchange

On February 19, 2007, Edward Ntalami, Chief Executive Capital Markets Authority (CMA) issued a notice that Francis Thuo and Partners have been barred from accessing the trading floor of the Nairobi Stock Exchange for 14 days to enable it address certain financial, operational and non compliance issues. The statement went further to state that the firm was directed to temporarily halt further trading and dealing, address the non compliance issues and deal with pending obligations to its clients.

The firm has since been placed by the CMA under management under the Nairobi Stock Exchange.

It is estimated that a sum of KES 140 million has gone down with this broker.

Investors, who initially thought they were covered to the full extent of their investment, were shocked to hear Mr. Ntalami say that each of them could only expect a maximum sum of KES 50,000/= compensation from the Capital Markets Authority.

The loop holes now existing in the electronic trading system of the Nairobi Stock exchange are simply mind boggling and permitted Francis Thuo (and perhaps others) to:

i) give the brokers free access to their clients’ investments, unlike in the past where share certificates, a crucial document that was required for any transaction, was held by the investor and would only be surrendered when the investor wanted to liquidate his stocks.

ii) allow dealers to sell the shares when they hit a certain peak without the shareholders’ consent, only to replace them when the prices dip, making a killing in the process.

Mr Daniel Mwaniki is reported to be one such victim of exploitation by the unethical brokers.

After being a client for over 22 years at the now ailing stock brokerage firm, Francis Thuo and Partners Ltd, Mwaniki was shocked when he noticed that his broker, without his consent, had sold his 4,000 National Bank of Kenya shares valued at over Sh200,000 in January this year.

Upon making an enquiry, one of the firm’s directors, Mr Peter Thuo, hastily credited Mwaniki’s account with 3,000 NBK shares and bought him an additional 1,000 shares at a cost of Sh40,000.

A short text message from the director to Mr Mwaniki reads thus: "We have put back in your account 4,000 NBK shares as agreed. Thank you. Peter Thuo."

Regulator inaction

It is very disturbing to note that the legal custodian of shareholders’ investments and the market regulators — the state owned Capital Markets Authority (CMA) through the Central Depository and Settlement system, has all along been aware of the current loop holes and actual exploitation of the system.

In October last year, the CEO of the Central Depository System is alleged to have been quoted in a local daily as saying that it is "technically possible" for a stock broker to initiate a transaction without consent, and warned that shareholders should question any suspicious transactions reflected in their statements.

Lack of verification requirements

Prior to the commencement of the Automatic Trading System at the NSE, a written authorisation and a share certificate from the shareholder was required for any dealing in an investors’ shares to be commenced by a broker.

This requirement appears to have been ignored by stock brokers. Indeed, No verification by the shareholder is required before a share transfer is effected.

Present customary practice is that brokers from the different stock brokerage houses post orders from their clients into the system, which then automatically matches them without any requirement for authorisation by the shareholder.

Mr Wellington Mutuku Mbondo is reported to be another victim of the stock brokers.

His four thousand five hundred shares (4,500) of Kenya Power and Lighting Company (KPLC) were sold in January without his consent. He discovered that they had been sold when he got his statement from the CDSC weeks later.

With each KPLC share trading at Sh278 at close of the market on Friday, last week, Mr Mbondo is facing a possible loss of Sh1.25 million. To add to his misery, Francis Thuo were his stock brokers.

Widespread

Similar stories have been reported involving a number of other stock broking firms.

Lack of transparency and action by the CMA

It has been reported that many investors with complaints have been unable to obtain any sort of action from the CMA.

Francis Thuo has been having financial problems for quite a while, but the CMA has conveniently failed, refused and/or ignored to take action to prevent members of the public from pouring their money into the Francis Thuo bottomless pit.

Reported Irregularities on the trading floor

During Eveready IPO’s first day of trading at the stock market, a ‘hitch’ in the system was said to have restricted the share price movement to a rate above 10 per cent. Under normal circumtances the first day of trading of an IPO, the share price can fluctuate by margins of more than 10 per cent of the initial price.

The CMA opted to leave it to Nairobi Stock Exchange to issue a public statement. This was the situation again when news of the CFC/Stanbic banks merger talks that saw the bank’s share price soar to Sh900, which was later attributed by the NSE to be a 'mistake'.

UCHUMI remains suspended from the Nairobi Stock Exchange and the CMA has not given any indication as to when, if ever, investors may redeem the values of their shares in the company.

The above are serious anomalies....which need redress. Not only do investors have to deal with fluctuation of share prices, they also have to contend with insufficient regulatory laws and a slow moving and non-anticipatory Capital Markets Authority.

Is it any surprise that stocks at the Nairobi Stock Exchange are now falling on a daily basis, in spite good earnings reported by the companies?

The risk is yours.

Michuki's shoot to kill Order and the Right to Life

Last week's endorsement by Internal Security Minister John Michuki of his officers to gun down any suspect caught with a gun is a gross contravention of thepolice Constitutional right to life, let alone the right to be taken through the due process of law.

Mr. Michuki may be a frustrated man as violent crime surges in this country, but his orders shall not solve the problem.

Indeed it has been touted that many innocent lives shall be lost through unnecessary deaths at the hands of police officers. It is not inconceivable for innoncent persons to have firearms (even toy pistols) planted on them to justify their death.

It is high time that this country puts in place a body akin to the UK's Indepenent Police Complaints Commission.

Such a body would indendently investigate all complaints from the public against individual police officers, and take necessary action against including commencing criminal proceedings against them.

In the meantime, the following skeleton pointers may assist Hon. John Michuki to deal more effectively with crime:

1. There is need to set out the nature of the problem and current trends
2. develop a comprehensive strategy
3. develop a comprehensive violent crime reduction strategy
4 develop a strategy to intercept sources of illegal arms
5. develop a constitutionally acceptable strategy to deter illegal gun possession and carrying
6. implement education intiatives

The above strategies must also include a comprehensive review of the competence, remuneration and recruitment systems of the police force.

Criminal prosecutions wrong jurisprudence for civil cases

Yesterday, the Court of appeal barred the subordinate courts from continuing with the criminal prosecution of former Kenyatta National Hospital (KNH) director, Mr Hosea Waweru, and then chief legal officer, Mr Jorum Mwenda Guantai, on the basis that ..." it is wrong jurisprudence to attempt to rescind lawfully executed contracts by criminally prosecuting the officials of a State Corporation, who are deemed to have breached the regulations."

As one wise judge has previously noted, every civil action can be criminally prosecuted..and hence criminal prosecutions should be commenced in clear cases.

What a relief...that our Court of Appeal is still on top of legal jurisprudence in this country.

Mortgages are nothing but trouble

It was interesting to read an article in the East African Standard entitled "Escape door from a troubled mortgage"

The article gave a few suggestions on how to help yourself escape the mortgage repayment trap.

In my view, it was simply to prolong the inevitable.

Mortgages are legal instruments pursuant to which you give your financier the right to sell off your house, upon default.

Financiers are in the financing business with a view to making money. I have seen many times how merciless they can be, notwithstanding even the death of the person who has taken out eth mortgage, let along unexpected job losses.

The propert shall be sold if you default.

Perhaps your possible saving grace is that you find yourself a good lawyer, who knows how to dig holes in the financier's documentation, in order to secure you a lifeline.

Having said that, the in duplum rule, is just about to kick in, and will ensure that the interest on defaulting loans, does not exceed twice the principle amount lent....which is a good thing!

Murder of a suspect or not

Last week, Simon Matheri Ikere met his maker after he was shot by police at his home.

He was buried yesterday.

The Kenya National Commission on Human Rights Chairman Maina Kiaia, wrote an article in the dailies, alleging that the circumstances under which Matheri died, were suspicious.

He alleged that Matheri had been questioned for 30 minutes before he was shot.

Question: Was this murder?

The jury is out on this one.

What is clear, however, is that dead men tell no tales!

Maina, as he rightly put it, is unlikely to receive much support in his allegations, whatever may have actually happened.

Deadly violent crime has reached intolerable levels in this country, and most of the public will look at Matheri's death with approval.

Another question: What will be achieved by charging Matheri's wife with the offence of harbouring a criminal?

Cash carrying risks

This week, we experienced the sad story of three policemen who died when their cash carrying Wells Fargo van was ambushed, riddled with bullets, and KShs. 22.4 Million in cash stolen.

Like all crimes, this one too could have been prevented.

One prevention tip is to have a separate chase car carrying the cops. This has now been implemented through a directive issued by the internal security Minister John Michuki.

The second prevention tip is to ensure that the cash carrying vehicles are bullet proof. The ill fated Wells Fargo van does not appear to have been bullet proof, although there are a number of security courier companies that have bullet proof vans.

The third prevention tip is to ensure that all persons in the cash carrying vans have bullet proof vests.

And the fourth is to avoid predictability regarding the times when cash is carried around.

Clearly, the thugs were well informed on when the delivery would be made, including the timings and the cash involved.

Someone is obviously not doing his/her job somewhere...and is placing innocent lives at stake.

Kenya - Teargas has no role in democracy

Reproduced from the Daily Nation of 7th December 2006 It looks as though we are approaching the end of the year under heightened political tension. The row over the coup that placed Government allies in the leadership of the Official Opposition has provided a rallying point for those whose mandate is to keep the Government on its toes. The result was the protest on Tuesday that was violently broken up by police in Nairobi. We are likely to see more of such protests in coming days. Tear gas and truncheons may not be enough to cow opposition leaders who have been handed by the Government the ideal issue on which to galvanise protests. Without looking into the legality or otherwise of the coup in Kanu and appearance of Government complicity, the important thing is to ensure the situation does not escalate into violence. We are at a stage in the development of democracy where legitimate protest must be accepted in accordance with the constitutional guarantees on the right to free speech, assembly and association. What is important is that peace prevail, in which case the Government has no cause to call in riot police where there is no threat to law and order. It is thus incumbent on those organising the protests to ensure they remain peaceful, and the organisers must know they will suffer the consequences if the law is broken. But it is also incumbent on the Government to ensure those who wish to legitimately assemble or march are given the freedom to do so.

Police should only come in if it becomes necessary to restore peace. These are principles that must be adhered to as we approach what could become a frenetic election year.

Licencing of political rallies and demonstrations and police action in breaking them up

The last time I checked, if you wish to hold a rally or demonstration of any sort, you only need to notify the authorities of your intention, and there is no requirement that a licence be actually issued.

Today, we have witnessed the ODM rally, which had been cancelled by the Government, duly dispersed with tear gas et al.

The point i want to make here, is whether the police should actually be using the kind of force that they do to disperse such rallies. A combination of the tear gas, water dispensers, arrests, physical beatings by the police appear to be excessive.

There have been furores in the United States recently, when police have been sighted beating up persons who were not a threat to them in any way.

When shall Kenyans decide to put their foot down on violation of their rights?

I have no doubt they have the capacity to do so....properly seen when people walked to work and back to their homes for a few days, when the matatus were on strike while fighting the 'Michuki rules'.

Perhaps their reluctance may be driven by the notoriety of the police to fire off live bullets when breaking up a demonstration....but the wrongs must be righted...some day...hopefully sooner rather than later.

As for Kenyatta, Ruto & Co., have they not yet figured out that they are NOT in power, and that your greatest enemy is the one within your ranks?

I am not surprised by the trump card played by the Government in these matters...only genuine admiration do I have.

the law of evidence in motor vehicle accident

This morning, my car was fairly badly damaged in the parking lot outside my flat, by a lady driver who is still learning how to drive.

She claims that she is still unfamiliar with her automatic gear shift and while intending to hit the brakes, hit the acceleration pedal instead.

I felt sorry for her as I directed her car onto a safe parking.

She surely is still a learner, with a young family.

Why does she risk her life and the lives of her young babies, by driving out onto our mad roads, when she is still not yet competent, and does not carry a Learner's sign on her car.

Well, remembering the need for collecting evidence, I took a few photos of the accident scene with my camera, just in case her remorse turns into denial in the fullness of time.

Meantime, as my car was grounded and not insured, I may have to look for money to repair the hideous damage, that is unless she agrees to do it for me. She better, or I shall most certainly sue her to recover my loss.

Police breaking the law

Last night on the KTN news, I watched three or so policeman harass innocent members of the public on the dark alley next to Standard Chartered Bank on Tom Mboya Street.
These male policeman forced a lady in the alley to lift up her skirts so that they could do a body search. Money which fell off her hand bag was quickly pocketed by the policemen.
To make it worse, they bundled her into an unmarked car and drove her to God knows where. God be with her.

That there are many policemen in this country who have gone bad is no mystery. A report issued the other day indicated that Nairobi residents are more likely to be shot dead by a policeman than by a criminal. http://allafrica.com/stories/200609180475.html.

The study conducted by former Chief Government Pathologist Kirasi Olumbe and Dr Ahmed Kalebi, the North Eastern provincial pathologist, observed that the victims are more likely to be shot in the streets of the city suburbs and estates. The study further established that while police were most likely to shoot a suspect many times, majority of the criminals shoot their victims only once. The study also noted that the trigger happy policemen will always shoot to kill on the head or chest. It further noted that police were most likely to shoot a suspect many times, whereas majority of the criminals shoot their victims only once.

This is contrary to the requirements section 28 of the Police Act Chapter 84 Laws of Kenya that allow a policeman to use a firearm ONLY where the officer has reasonable ground to believe that he or any other person is in danger of grievous bodily harm or that he cannot otherwise effect an arrest.

Such shootings have been known to occur at pro-democracy ralies, http://auto_sol.tao.ca/node/view/757,

Significantly, such shootings by police at innocent civilians have often occured when the victim was unarmed and harmless. http://www.timesnews.co.ke/07nov05/nwsstory/topstry.html
even where the innocent civilian is on the floor pleading for mercy. It even happened to a innocent Catholic priest. http://www.cwnews.com/news/viewstory.cfm?recnum=14480

This alarming trend cannot be rectified where the Police bosses defend the above practice, such as Kingori Mwangi did by saying "majority of those gunned down were dangerous criminals who posed a serious threat to the public and the shooting officer."

The truth will always be that dead men tell no tales, which has worked many times in favour of the errant officer.

It has also been felt that the actions of the Police have a lot to do with the shoot to kill orders of Internal Security Minister John Michuki. http://news.bbc.co.uk/2/hi/africa/4374649.stm

It has long been said that Kenya needs to urgently establish a body independent of the police infrastracture, akin to the Independent Police Complaints Commission in England and Wales, that would receive complaints from members of the public on errant shootings, summon the policeman concerned, hold a minitrial, and pass judgment on the officer, resulting in imprisonment and fines.http://www.ipcc.gov.uk/

Unfortunately, our MPs are not making the right kind of noises in the right kind of places, especially since it doesn't add any beef on their sizeable platter.

Further, the breaches of human rights and the law by many of our policemen does not appear to be interesting to Maina Kiai, who seems to find corruption related issues more attractive, in spite of a lack of mandate in that general area.

Be that as it may, you need to know how to possibly avoid being shot by trigger happy policemen in our country. Free advice:

a) avoid poorly lit alleys and streets, such as those many alleys along Tom Mboya Street
b) avoid staying late on Fridays, rogue policemen will want to arrest you on Friday, as the bribes are said to be better so that you can avoid spending the weekend in the cells
c) do not dress suspiciously (presumed to be rastafarian outfits, all untidy and unkempt outfits)
d) do not drive suspicious cars (presumed to be very old rickety cars)
e) do not drive in a suspicious manner(presumed to be in a zig zag manner, or driving round and round a particular location)
f) always have the mobile number of a policeman (the senior the better) you can call on if necessary
g) avoid pubs and clubs in the Nairobi CBD if you are not driving home thereafter
h) always carry extra money on you, other than that which you have in your wallet or handbag
i) strong arguments with policemen , especially at secluded places at night, are to be avoided

Should you choose to ignore the above, then say a loud prayer, it may just save you!

cops and corruption in Kenya

Today I keenly observed what many Kenyans observe every day. A traffic policeman stops a driver on the road to Yaya Centre at Hurlingham. The driver was caught talking on his mobile.(it could be any other minor traffic offence) The policeman quickly invites himself into the front passenger seat and the car moves ahead, slowly. Being in the vehicle directly behind, I clearly see the traffic policeman say a few words, and receive a bank note from the driver, clearly a bribe. The traffic policeman then exits the vehicle a few metres ahead, a flat expression on his face which comes from having done the same thing many many times.
...it is simply bewildering that the Police Commissioner has not been seen to act against these corrupt officers. The Kenya Anti Corruption should continue to hound the Police.

Fraud in Kenyan companies

Just the other day i received instructions to recover some money for a Client that had disappeared when a company went down.
After some investigation, I came to discover that the Companies Act allows the shareholders to voluntarily dissolve a company, so long as they swear an affidavit stating that the company will be able to settle all its debts.
Alas, it is only after the liquidator has moved in that it is discovered that the company cannot pay off its debtors. By this time, the shareholders have taken off scot free. This is what I am now dealing with in the Court.

Beware of trading with companies that have only 2 or 3 shareholders doubling up as Directors of the same company.