Safaricom denies theft of M-Shwari concept

What you need to know:

Faulu's claims:

  • Faulu Kenya alleges that it signed a non-disclosure agreement with Safaricom when it presented the concept paper in 2011.
  • The deal, it says, restrained either party from disclosing information on the concept to a third party or using the information to gain competitive advantage over the other.
  • Faulu has accused Safaricom of breaching the agreement and contravening it’s trade secrets and copyright.

Mobile phone service provider Safaricom, has denied allegations that it stole the M-Shwari concept from Faulu Kenya. Read (Safaricom stole our idea to roll out M-Shwari, Faulu Kenya says)

Safaricom chief executive Bob Collymore on Thursday said his company would seek to resolve the dispute through legal channels, accusing the micro-finance company of malice.

Safaricom launched the M-Shwari service last month in partnership with the Commercial Bank of Africa (CBA).

The new product, a value-add on Safaricom’s money transfer service M-Pesa, allows users to save and borrow money from the bank.

Faulu Kenya has sued Safaricom over copyright of M-Shwari, saying the mobile phone service company stole the idea it developed in 2011.

But Mr Collymore said Safaricom and CBA followed the law in developing M-Shwari.

“We wish to assure our customers that all measures will be taken to ensure minimal service disruptions during this time.”

Mr Collymore sent two contradicting press releases in four hours seeking to clarify Safaricom’s position.

In the first one, e-mailed to the media at 9.48am, Mr Collymore said “M-Shwari is a proprietary product of Safaricom Ltd, which is the successful result of a two-year product development process”.

At 2.26pm, he beat a retreat: “Safaricom Ltd seeks to clarify that M-Shwari is a banking product of the Commercial Bank of Africa and authorised as such by the Central Bank of Kenya.”

Faulu Kenya went to court on Monday claiming that it had shared the M-shwari idea with Safaricom through a concept paper, for possible collaboration.

It wants the court to permanently stop Safaricom from offering the service, and is claiming damages.

Faulu Kenya says it is already offering the service under the brand name Kopa Chapaa, in partnership with Airtel.