Will the Venter Family Set Altech Free Before the Death of KDN?

Craig Venter, CEO Altech Group

I have a very strong passion in home grown investments. I love to see Kenyan enterprises grow and become regional powerhouses. That is where KDN was until Altech Group decided to exert its influence and manipulate the operations.

KDN is now on a downward spiral. Clients, suppliers and even partners are leaving in droves. The company is making losses according to the Altech Group financial statements.

Analysts who have worked with KDN and still have investmen dealings with the company say that KDN is a victim of strong arm tactics employed by the Venter family.

Altech was founded by Dr Bill Venter, then a 33-year old telecomms engineer, in 1965 as Allied Electric. You can read the whole history here.

Fast-forward to 2008 when Altech group acquired 51% stake Kenya Data Networks (KDN) from Sameer Africa for approximately $75 million (Ksh 5.2 Billion at 2008’s exchange rates of Ksh 69 to the USD). Naushad Merali made his money from the sale and has has shown no interest in rescuing the company now being run down by the South African based Altech group. Altech increased its stake in KDN to 60.8% in April 2010.

In 2009, KDN started building a 1,500 fibre link from Mombasa to Kampala. Besides KDN, Altech Group through Altech East Africa own Swift Global, Infocom Uganda, and Altech Stream Rwanda.

But Altech Group has a very complicated arraangement with KDN which makes analysts say that the Venter family is making good money from Altech and might not be interested in seeing KDN start making profit.

Altech buys SEACOM data cheaply through a nondescript company called Altech Data International. ADI is owned by Altech Group through Altech Mauritius. ADI sells data very expensively to KDN and other Altech Group companies earning the directors cool amounts.

The group also own 8.5% of TEAMS capacity formerly owned by KDN. The capacity acquired Altech Group on TEAMS is 10% of the capacity owned by Kenya. The group sold its capacity of terrestial fibre link to SEACOM at $20 million

The group is still controlled by the Venter family with Craig Venter now in charge. The autocratic boss of Altech is said to be a master schemer who must have learnt how to suck the juice from fruits like KDN and leave them bare and starving. His main tutor is said to have been Mr Merali.

Merali’s Midass Touch +

Early this year, Altech Group’s Chief Operating Officer, Jeffrey Hedberg left in some very unclear circumstances. Not much has been heard from Jeffrey who has chosen to shy away from the media controversy over his departure 6 months after his much publicised appointment. Mr Venter announced Hedberg’s appointment in April 2011 making some very extravagant promises about what Jeffrey would achieve at Altech.

Craig promised that Hedberg’s priority “would be  to turn around the group’s ailing East African business.”

“There’s no question in terms of East Africa. Jeffrey has built networks, Jeffrey understands how to run a network operator,” Craig added.

Jeffrey who is an American played a key role at Swisscom and was chairman and CEO of Deutsche Telekom in the US before moving to South Africa in 2006 to turn around Cell C, which was losing over Ksh 3 billion annually. Within 3 years of taking over, the company was making over Ksh 3 billion in profits.

Again in late 2009, Telkom South Africa tapped him to turn around the ailing telco’s Multi-Link network in Nigeria. He was appointed acting CEO of Telkom SA in 2010 where he turned around the company. Jeffrey resigned when he realised that Telkom SA would not confirm him as CEO. That is when Craig Venter pounced on Jeffrey.

Craig Venter is a domineering character who is almost an extreme autocrat, according to analysts. When Jeffrey joined Altech, people thought Craig Venter would trust him with the firm and ease his grip.

But within few months, Craig Venter could not allow Hedberg to freely manage the operations of the group instead intervening in all situations. In essence, Craig and Jeffrey were all playing CEO and they did not agree 99% of the time. Both have strong characters. Jeffrey bolted out and then Craig went out accusing him of all manner of things including that Jeffre “underestimated the role of COO and had wrong mindset for Altech.”

Jeffre never responded to Craig directly only saying that the allegations were “unfortunate, inappropriate and do not represent the facts.” He said such petty fights are not his types and so he wouldn’t allow himself to be drawn into such fights. South African financial analyst thought that with the response, Jeffre just told Craig a big f##$% you.

With Jeffrey’s entry, Altech Group’s shares in JSE rose sharphly and fell with his departure. Now with almost 16 years on the reigns of Altech, investors believe that Craig Venter must set Altech Group free.

I really doubt if he will set the company free nor do I believe that him running down KDN should be ignored by the Kenyan company. The sorry thing about this Kibaki government is that they are just so useless when it comes to protecting the interest of Kenyans. They only get in when there is some looting to be done.

Written by Robert

Respected Kenyan blogger, tech evangelist, and social justice activist. Robert is known for his hard-hitting articles and opinions disseminated through his Twitter handle @RobertAlai or Facebook page (

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