Mining licenses in Kenya: What is the issue with assignment of licence as equity contribution?

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Cortec Mining Kenya Ltd
The commission established by the Secretary in Charge mining claims that:-

The initial issuance of Special Mining Licence 256 was not done properly. The task force recommended cancellation of the licence.The company’s Prospecting Right was not in the name of Cortec Mining Kenya Limited but in the name Harrie Kinoste Ndungu.
The County Council’s consent and the Mining Deposit Receipt were also in the name of Harrie Kinoste Ndungu and not in the name of the company.Licence type issued not in line with those available for issuance under the Mining Act.

26th April 2013 His Excellency President and Commander in Chief of the Defense Forcesof the Republic of Kenya, Uhuru Kenyatta (centre) with from left to right Mr. David Anderson (CMK Managig Director), Mr. Moses Masibo (Commissioner of Mines), Miss Jacqueline O'Sullivan, Mr. Don O'Sullivan (CMK Chairman), Mr. Darren Townsend (CMK Director, Mr. Jacob Juma (CMK Director) and Permanent Secretary for Internal Security Mr. Mutea Iringo.

26th April 2013
His Excellency President and Commander in Chief of the Defense Forcesof the Republic of Kenya, Uhuru Kenyatta (centre) with from left to right Mr. David Anderson (CMK Managig Director), Mr. Moses Masibo (Commissioner of Mines), Miss Jacqueline O’Sullivan, Mr. Don O’Sullivan (CMK Chairman), Mr. Darren Townsend (CMK Director, Mr. Jacob Juma (CMK Director) and Permanent Secretary for Internal Security Mr. Mutea Iringo.

Pacific Wildcat Resources Inc owns 70% of Cortec Mining Kenya Ltd while the balance should be controlled by the Kenyans including Harrie Kinoste Ndungu, his assignees or estate which is a normal practice in business paarticularly if the licenses were his contibution to the company. A person of majority age and sound mind is allowed to deal in both intellectual property, licences and other resources as they deem profitable,why does the commission have an issue with Mr Ndungu acquiring licences and then establising a joint venture in which his contribution is the use of the licences?
It is common business practice to hold liceces,patents,and other intelectual property in a person or an entity diferent and separate fromthe operation entity. The Kenya government should not give the investment community a chance to think that there was some truth in claims of arm twisting for personal benefit.

To calm foreign investors in the capital intesive mining industry, we hope the government will not penalise the company investors for ommissions of its officers. The current adminstration is a continuation of the former adminstration since there was no coup but just a change of guard.

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