So AccessKenya has been touted as this great company which was built by David and Jonathan Somen who happened to be such great minds. They managed to pull the move and together with strong connections in the CMA and the Kibaki’s government, had this great IPO which resulted in the more than 300% over-subscription of the shares.
The share details were as follows;
Offer Dates: April 19th – April 30th 2007
IPO price: Ksh. 10.00
30% of the Company or 80 Million shares on offer.
28 Million to Retail Investors
4 Million to Employees
48 Million to Institutions
Minimum individual application:
5,000 shares or Ksh.50,000.00
Minimum Institutional application:
50,000 shares or Ksh.500,0000.00
Even after this IPO, AccessKenya’s situation didn’t change much and a strong manouver and secret movement of cash was hatched by David Somen who happens to be the crooked of the two Somen brothers. Jonathan is praised as a shrewed businesssman whose interest was to build a great company and improve the company. But after tasting the money from the IPO and getting to hobnob with the powers that be, he changed from that great businessman and managed to fall for the cajoling of his brother, David, and the siphoning of money from AccessKenya started.
By the end of 2009, AccessKenya didn’t have much in liquid cash out of the more than 800 Million shillings raised from the IPO. All the money were secretly wired to offshore locations with David and Jonathan playing a big part in that. AccessKenya as it remains now is a shell of a company cannot boast of any strength to entice a prospective investor. When all the wiring of the money was complete, Jonathan and David were on a shopping spree for interested parties to buy the company. I am not sure if they go any offers but some sources tell me that there were not much offers. After the IPO, the share price shot to all time high and was Ksh 36. Now the share price flactuates between Ksh 9.10 – Ksh 9.35 which is below the IPO price of Ksh 10.
AccessKenya’s Share Pricing Graph for the last 3 years;
The Somen brothers have continued to blame the acquisition of 70% of OpenView Business System in 2007 at Ksh 150 Million as the main cause for AcceessKenya woes. The remaining 30% of OpenView were acquired by AccessKenya at Ksh 18 Million in 2010. The problem is that David Somen was running and is still running some business called Virtual IT Limited in UK. Virtual IT Limited was at one time voted even among the fastest rising small IT companies in UK. The AccessKenya money which were repatriated to accounts in Ireland, were used to better the Virtual IT business. Virtual IT was ranked number one in London and number 3 in Uk in the Deloitte Fast 50 Tech Awards.
OpenView was bought and immediately David embarked on changing the business from providing outsourced services to corporates to actually trying to offer the small services to SMEs. The problem is that SMEs are not a great venture in Africa and relying on them for business was not that wise. OpenView started on a downward spiral and the Somen brothers went out full blast blaming the previous owners for selling to AccessKenya a shell of a company.
We are told that the Somen brothers saw red in AccessKenya the moment Safaricom acquired One Communications. Safaricom’s foray into what had been AccessKenya’s forte was such a strong red flag that the repatriation of profits and capital from AccessKenya books was hurried through. This ignited a boardroom war which saw the quit but angry exit of 3 key directors of the company. Though the boardroom war was blamed on the inflated cost of building the metro cable to serve the over 3,500 residential clients, that was just part of it. The other reason was that. While bidding time and looking for suitors, the Somen family reduced their stake in the company from 45% to 25.4% quietly. The Somen family have previously blamed heavy investment on the fiber optic as the main cause and though they have bragged in many instances how the company has the most stable cable, the quality of connection offered by the company pales in the shadow of even such companies as Zuku and some small broadband home providers.
The company later ventured into content provision which saw them start the home portal. The www.home.co.ke was one time only second to Daily Nation website in local internet traffic. The portal is now a pale shadow of its former self with strong indication coming that AccessKenya expects to shut down the portal sooner rather than later. The portal has never broken even considering the investment put into building it. AccessKenya was used to providing cooked up statistics with the hope that users would be enticed with great raves and reviews without content, WRONG. Users flocked Home Portal because of the great content which was previously being well delivered. We questioned the display of cooked up stats while the independent web crawling services were giving a different picture.
In fact, AccessKenya is still in the league of companies which will offer you a 256/512Kbps connection at a rate of almost 9,000 for corporate connection. This kind of connection cannot be expected from a company with high investment in the cable. If you want higher speeds from AccessKenya, you will be forced to fork an extra Ksh 25,000 per extra Mbps of link according to Safaricom staff based at Westgate Shopping Mall’s experience centre.
AccessKenya is on a downward spiral and the fact that the people who bought onto the company’s IPO are ordinary Kenyans makes this a case of one of the biggest financial fraud under the watch of CMA. The capital movement at AccessKenya have never made CMA intervene and ask questions. Since the last year was the first in AK’s loss making, the margin of loss is set to increase and nobody will be held to account as we hear that key personnel at CMA were aware of what has been happening at AccessKenya and nobody has cared to intervene.