Ipsos-Synovate directors risk jail, hefty fines over takeover

David Somers of Ipsos speaks during a press conference in Nairobi announcing the acquisition of Synovate on October 13, 2011. PHOTO | STEPHEN MUDIARI | FILE  NATION MEDIA GROUP

In Summary

• Ipsos bought the entire stock of Synovate whose Kenyan unit remains the largest research firm in the country
• The directors face a jail-term of five years, a fine of up to Sh10 million and CAK can also impose a financial penalty equivalent to 10 per cent of a firm’s sales

By VICTOR JUMA
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Directors of research firm Ipsos-Synovate Kenya face jail terms and multi-million-shilling fines for failure to seek regulatory approval of the firm’s acquisition of its predecessor Synovate.

The Competition Authority of Kenya (CAK) says French firm Ipsos did not seek its approval when it acquired Synovate’s operations in four countries including Kenya in October 2011.

The watchdog has the mandate to review the impact of cross-border transaction on whether a deal will cause negative competition and hurt consumers.

Ipsos bought the entire stock of Synovate whose Kenyan unit remains the largest research firm in the country, exposing itself to regulatory action for failure to notify CAK.

(READ: French firm acquires Synovate)

The authority has forwarded the matter to the Director of Public Prosecution (DPP) with a view to have Ipsos Kenya’s directors face action court.

The directors face a jail-term of five years, a fine of up to Sh10 million and CAK can also impose a financial penalty equivalent to 10 per cent of a firm’s sales.

“Upon investigation by the Authority, it was established that the transaction took place without authorisation as required,” CAK said in its latest annual report.

The DPP has advised the Directorate of Criminal Investigations (DCI) to investigate the matter further.

Ipsos Kenya derives its revenue from research (70 per cent), media monitoring (20 per cent) and opinion polling (10 percent).