Safaricom’s founding chief executive, Michael Joseph, has revealed that he sold off his entire shareholding in the company to fund the construction of his retirement home.
Earlier regulatory filings showed that Mr Joseph — who currently serves at the interim CEO of Safaricom following the death of Bob Collymore last year — sold his entire stock in the giant telecommunications firm in the course of its fiscal year to March 2019.
Disclosures in the company’s annual report showed that Mr Joseph owned 1.17 million shares in the telco as at March 31, 2018, but had sold all of them by the end of the financial year.
The move raised speculation over Mr Joseph’s future ties with Safaricom — a company he has been credited for moulding from a department of a former State corporation into East Africa’s most profitable company, impacting on the lives of millions of people through telecommunication and money transfer services.
Mr Joseph, however, told the Business Daily that he offloaded his shares to fund the construction of his retirement home.
“When you invest in a company like I did with Safaricom you invest for a reason,” Mr Joseph said. “You invest at some point because you want to invest. When you take the money out you want to spend on something. In my semi-retirement I am building a house and I needed the funds”.
He did not immediately reveal where he is building the home.
Mr Joseph already owns a home in the Lewa Wildlife Conservancy in northern Kenya. Formed in 1995, the Lewa conservancy is a wildlife sanctuary covering over 62,000 acres that is home to a wide variety of wildlife, including the rare and endangered black rhinos.
Mr Joseph secured Kenyan citizenship in 2014, joining a long list of expatriates and diplomats who opt to live in Nairobi after their tour of duty. He took advantage of the 2010 Constitution that allowed Kenyans to hold dual citizenship, which means he does not have to denounce his US nationality.
Going by the prevailing Safaricom share price of Sh27 around the time he offloaded his shares, Mr Joseph’s shareholding was worth well over Sh31 million. Safaricom’s share price closed at Sh32 on Thursday.
“If I could keep (my shares) there, I could keep them there. I could keep them for sure. It has nothing to do with Safaricom,” he said on the decision to sell off his entire stake.
He has led Safaricom in an interim capacity since last July’s death of his successor, Bob Collymore. Safaricom last October appointed former East African Breweries Limited (EABL) finance director Peter Ndegwa as its new CEO. Mr Ndegwa, a Starehe Boys Centre alumnus, will take over from Mr Joseph on April 1.
Mr Joseph, who is also the chairman of national carrier, Kenya Airways , said he would remain on the Safaricom board after stepping down from the interim role.
“My term is not up,” he said.
The government, which owns 35 percent of Safaricom, had expressed its preference for a Kenyan to take over from the late Collymore, breaking the trend where Vodafone had always appointed the CEO and chief financial officer at the telecom operator.
Vodafone had a 40 percent stake in the firm before ceding a 35 percent stake to South Africa’s Vodacom.
Mr Joseph, 73, joined the Safaricom board on September 8, 2008 and was employed by Vodafone Group Services Limited as the Director of Mobile Money. He currently serves as Vodafone’s Strategic Advisor to the Boards of Vodacom Group South Africa, Vodacom Tanzania, Vodacom Mozambique and Safaricom Limited in Kenya.
He was the CEO of Safaricom Limited from July 2000 when the company was relaunched as a joint-venture between Vodafone UK and Telkom Kenya until his retirement in November 2010. During his tenure, he steered the company from a subscriber base of less than 20,000 to over 16.71 million subscribers.
Safaricom’s net profit for the six months through September this year jumped 14.4 percent to Sh35.65 billion on strong M-Pesa and mobile data revenue growth that offset a decline in voice and messaging (SMS) revenues. This has set the telco on course for the eighth straight year of increasing its bottom-line.
Mr Joseph took over at KQ in 2016 from Toyota Kenya chairman Dennis Awori. He has been in the forefront in overseeing the implementation of a turnaround strategy to rescue the struggling carrier, which reported a Sh7.55 billion net loss as December 2018.