Kenyan Ministry Official Quits BitPesa Board And Sells Shares To Avoid Conflict Of Interest
Kenya's MPs have given Treasury two weeks to determine the legal status of cryptoassets.
Joe Mucheru, the secretary of Kenya’s Ministry of Information and Communications and Technology (ICT), resigned from the board of BitPesa, Africa’s largest bitcoin trading platform, and started to offload his shares to prevent any conflict of interest, according to technmoran.com, an African news site.
While some Africa bitcoin observers might view his departure as another setback for BitPesa, which has faced several challenges following its promising beginning as a bitcoin pioneer in Africa, his action demonstrates a commitment to integrity and impartiality that could bode well for Kenya’s technological advancement.
A Commitment To Integrity
Mucheru said the decision to honor his earlier promise to leave BitPesa’s board and sell his shares in companies under the ICT ministry is in the best practices for public officials.
A former Google executive, Mucheru also said he would divest from Wananchi Group, an Internet service provider he co-founded in 1999 and trades under the name Zuku. He said he has received waivers to offer his shares to both existing and new Wananchi shareholders. Mucheru and Njeri Rionge co-founded Wananchi Nominees Ltd., the holding company for Wananchi Online.
Mucheru, 48, stands out from other Kenyan public officials who continue to hold or have been forced to leave boards of Nairobi bourse-listed and private companies.
The Constitution prohibits state officers from holding other gainful employment as board directorships. The Constitution’s chapter six calls for public officials to ensure impartiality in making decisions.
Mucheru was an early investor in Weza Tela, an IT firm that AFB, a Mauritian financial services firm, acquired last May for $1.7 million. He was Google’s first Sub-Saharan Africa employee and played a key role in establishing a Google presence in Africa in 2007, according to LinkedIn.
BitPesa Faces Challenges
BitPesa, meanwhile, has faced some challenges since its promising launch in 2013.
The company has become embroiled in a legal dispute with Safaricom, Kenya’s dominant telecom service. BitPesa is suing Safaricom, as is Lipisha, the payment gateway for both BitPesa and M-Pesa, Kenya’s dominant mobile payment service, CCN.com reported last month.
Safaricom stopped Lipisha from processing M-Pesa transactions and later reinstated it as long as it terminated its relationship with BitPesa. Lipisha and BitPesa claimed Safaricom has no right to require this.
Safaricom claimed BitPesa does not meet anti-money laundering (AML) requirements, which the latter denies.
BitPesa claimed it has implemented AML policies that comply with Kenyan requirements. BitPesa said the Central Bank of Kenya (CBK) has said it (BitPesa) falls outside of the bank’s money transmission and remittance regulations. Hence, Safaricom cannot require BitPesa to produce a CBK license when the bank regards it as inapplicable.
BitPesa Has Funding
BitPesa launched in November of 2013 and acquired customers in Kenya and Ghana. The company held more than $1.7 million in equity in its first year.
The company received more than $1 million in USD in additional funding for its African bitcoin operations in a round led by Pantera Capital Management LP with support from The Crypto Currency Partners LP, Stephens Investment Management LLC, CCN.com reported in October. The additional funding allowed BitPesa to expand to Tanzania and the eastern region to meet the need for low-cost, international transfers.
A Bloomberg story about Bitpesa in November made a big splash as the bitcoin price increased.
But the remittances did not catch on as predicted, CCN.com reported last week. Remittances have been part of Bitpesa’s business, CEO Elizabeth Rossiello said, but it is not the only segment, and it cannot sustain the full business. Bitpesa currently splits its efforts among e-commerce, speculators and remittances.
Featured image from Shutterstock. Image from LinkedIn.
