Kenyan politics disrupts sell-off

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The flotation of Safaricom, a mobile telephone operator set to be the biggest listed company in east Africa, has been dragged into the increasingly bad-tempered talks over the formation of Kenya’s coalition cabinet.

By Barney Jopson in Kigali

Both the government and the opposition covet the finance minister’s portfolio, which covers the Safaricom deal, and, as talks remained stalled, Raila Odinga, the opposition leader and prime minister designate, on Wednesday called for a delay to what he said was the “unlawful sale”.

Safaricom, part-owned by Vodafone of the UK, has been valued at $3.1bn. Its share offering was due to open on Friday ahead of the scheduled listing of a 25 per cent stake on the Nairobi stock exchange in June.

Mr Odinga’s intervention contained his first overtly hostile comments toward the government since he signed a power-sharing deal with Mwai Kibaki, the president, at the end of February, bringing to an end two months of post-election bloodshed and instability.

Tempers in Kenya had been cooled by the regular sight of Mr Odinga and Mr Kibaki smiling and chatting together in public, a personal rapprochement that helped foster a broader mood of optimism in the country.

In spite of lingering disagreements over the nature of Mr Odinga’s role as prime minister, members of parliament last week passed the bills and constitutional amendments needed to make the power-sharing deal law.

But disputes over the make-up of the cabinet have shattered the cordial atmosphere which has existed in Kenya since the deal was brokered. The post of finance minister is the most sought-after but the two sides are also haggling over the powerful defence, internal security, justice, immigration and local government ministries.

Mr Odinga said the government was seeking to move forward on the [Safaricom] sale in a manner which “will allow small cliques to unlawfully enrich themselves at the expense of taxpayers who helped create this successful company”.

His comments replayed suggestions, which were voiced by the opposition before the election but never substantiated, that the sale of Safaricom had been entangled in government corruption schemes known to have continued during Mr Kibaki’s first five-year term.

“One wonders if the delays in the formation of the cabinet are connected to this and other financial actions designed to escape the scrutiny that the new nationally-oriented government will impose on financial activities,” Mr Odinga said.

Esther Koimett, investment secretary at the finance ministry, gave no indication that Mr Odinga would succeed in delaying the process. “It’s fair to say that the [Safaricom] transaction will proceed. We are scheduled to launch the offer on Friday morning,” she said.

A government statement said: “It is very unfortunate that instead of coming for consultations and negotiations, [the opposition] have [resorted to] writing demand letters to the government and issuing unacceptable threats through the media.”

The Financial Times

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