Just imagine that if it wasn't for The Children Investment Fund (TCI) increasing their stake in ABN Amro to 1% and demanding that the bank either breaks up or looks for a merger, ABN Amro would today still be serenely going about its business as only the Dutch do. Tomorrow, Barclays will most likely confirm that it has agreed to merge with ABN Amro, thus acting as a white knight to save ABN Amro from being broken up. And its not as if the ABN was underperfoming, only that its strategy was not clear.
Today there are Kenyans who hold large but minority stakes in some of the top NSE stocks, the question is, would they demand for example that KQ fires its head of customer service following recent poor pefomance in this area? Or could Transcentury demand the cancellation of Manitoba's management contract with KPLC due to continued underperfomance? Only time will tell...
3 comments:
Shareholder Activisim will definiutely come to Kenya.Give it 3-5 years.Once the mutual funds and some pension schemes become larger.
The biggest issue is the icestuous biz relationships in Kenya e.g. i'm the MD of company X but sit on the Board of Co. Z and we share the same or some Board members+shareholders.There's no need for activisim any problem is solved privately behind closed doors.
Note that this only works (well) if there are strong minority shareholder protections laws.
The NSE & CMA can't even protect investors from unscrupulous brokers let alone listed firms!
Examples include A Baumann who have not published their results on time for years!
If the "majority" holds sway coz they control 50%, there is little other can do.
KQ has 2 major shareholders who agree on most things but not everything.
In 2003, GOK (23%)tried to impose "their" chairman (njenga karume) but were thwarted by KLM (26%) with support from other major shareholders.
1% in Kenya buys you little unless the firm has "dispersed" shareholding e.g. Mumias or KCB
I think the bigger drawback is cultural, investors don't realise that shares are more than just an investment. They are entitlement to ownership of the company.
CT-correct, we do need stronger shareholder institutions to protect NSE punters
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