Electronic Refunds for Diaspora Investors

Diaspora investors in Safaricom Limited are likely to have their refund proceeds credited through Electronic Funds Transfer and foreign currency cheques.

The Central Bank of Kenya and the Capital Markets Authority say such investors should contact the receiving banks through their selling agents to begin the procedure.

"The receiving banks will then make arrangements to issue a foreign currency cheque or make an electronic transfer to the investors accounts," read a joint communication from the two regulators.

However, these arrangements will be subject to appropriate due diligence and know your customer procedures(identity authentification) by the agents and lead receiving bank Citibank before they are effected. The decision was reached following considerations that many of investors in the Diaspora did not have local bank accounts.

According to Citibank managing director Ade Ayeyemi, by Friday last week, half of the 480, 000 cheques it had released had been cleared. The meeting also sought to find ways of speeding up the pace of issuing refund cheques to investors, which began on June 9.

Like local retail investors, refund proceeds for the Diaspora investors were also released in cheque forms by the receiving banks. This made it impossible for them to access the cheques either in person or through proxies due to authentication of investor identity by selling agents.

Representatives of brokers and investment banks approved the new procedure at a meeting convened by Investment secretary Esther Koimett on Friday last week. The meeting also agreed that cases of double applications and allotment of shares in teh initial public offering would be investigated on a case by case basis and in the shortest possible time.