Lunch not on menu at Safaricom AGM today

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By Morris Aron

Safaricom shareholders will have to make their own transport arrangements and lunch when they meet at Kasarani Sports Complex today for their Annual General Meeting — a first in Kenya’s corporate history.

This follows a move by the telecommunication giant to do away with fancy niceties that have become the norm in AGMs in a bid to cut down costs due to the large numbers of its shareholders.

"If we offered lunch and transport as has been the case, the costs will be overbearing," said Michael Joseph at a recent function.

Value for money

"We have had to make these choices to give our shareholders more value for their money."

Cutting down on giveaways such as caps and polo shirts alone will save Sh39.2 million. Safaricom will use its popular money transfer model, M-Pesa to pay dividends – trend that other companies are likely to adopt in the coming months as many embrace technology to cut costs.

All shareholders with dividend amounts below Sh35,000 — which is the M-Pesa limit — will be paid through the cash transfer facility, a move that will save the company Sh73 million if they were to use the Electronic Funds Transfer (EFT). Contrary to common practise, shareholders will not be charged for the transaction.

Safaricom will also exploit a clause in the Kenya Communications Amendments Act which allows for communication dissemination through electronic means by posting 2008/09 results on its website and through digital discs.

Printed versions of the financial report will only be done upon request saving the company Sh239.6 million. And this is the easy part. Top on the agenda will be the company’s bid to convince its shareholders on prospects of good profitability in the wake of increasing competition coming at a time when its share prices has stagnated at bellow Sh3.50. The shareholders will be briefed on recent acquisitions by the company, including a 51 per cent stake in OneCom at Sh185 million as part of Safaricom’s diversification strategy.

More recently, the company acquired a 100 per cent stake in a local Wimax provider Packet Stream Data Networks Limited.

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