SFO rules out further inquiry into Vodafone's Kenyan partner

James Macintyre
Saturday 29 March 2008 01:00 GMT

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The Serious Fraud Office (SFO) last night ruled out any further investigation into allegations of corruption involving a Kenyan mobile phone company of which Vodafone holds a 40 per cent stake.

The decision came as thousands of Kenyans lined up to buy shares in the public flotation of the company, Safaricom, after opposition calls to delay the biggest ever state selling of its sort in east Africa were defied.

The Kenyan government owns 60 per cent of Safaricom, the most profitable firm in the region. The other 40 per cent is owned by Vodafone Kenya – which itself is 87.5 per cent owned by the British-based mobile giant, with the remaining 12.5 per cent owned by a mysterious Guernsey-registered firm called Mobitelea.

The owners of Mobitelea remain unknown despite enquiries by Kenya's investment watchdog and the SFO, which said it had sent representatives to Kenya last year to meet with the country's own watchdog, and "examine the matter".

Last night however, the SFO said that it was refusing to investigate the company for reasons of "resources". "[The SFO director Robert Wardle] has the task of allocating resources, taking into account the prospects of success against the demands on resources. It is with some difficulty that he has decided that the SFO will not adopt this enquiry for investigation."

The decision comes despite a number of reports relating to the anonymity of Mobitelea, including claims of a "secret stake" in Safaricom allegedly linked to the family of the reviled former president of Kenya, Daniel arap Moi.

Vodafone has remained tight-lipped about the identity of those behind the off-shore firm. A spokesman said last March: "Mobitelea has never had representation on the board of Vodafone Kenya or the board of Safaricom. We have received guarantees from Mobitelea that no prohibited parties have benefited from this transaction".

Last night, Bobby Leach, the media director of Vodafone UK, emphatically denied any direct link between Mobitelea and Safaricom. "Mobitelea does not own shares in Safaricom," he told The Independent. Asked specifically about the arap Moi family, Mr Leach said he was obliged under confidentiality agreements not to comment on the ownership of Mobitelea.

The state is selling off 10 billion shares, which represents a quarter of the company's equity, and expects to raise 50bn shillings (£390m).

The Kenyan President, Mwai Kibaki, launched the sale yesterday, saying: "I ... wish to take this opportunity to invite all Kenyans ... to take advantage of this investment opportunity and take part in the success story we have created together."

Earlier, the opposition party, the Orange Democratic Movement, had called for a delay in the sale until Mobitelea's ownership was disclosed.

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