Intrigues as five directors resign from KP board
Fred Aminga @Faminga
Yesterday’s resignation of five Kenya Power independent directors has again stirred the usual undertones about the issue of business and politics. The board announced the unexpected resignation of five out of the 12 members in a notice.
“Kenya Power and Lightning Company hereby announces the resignation of Adil Khawaja, Kairo Thuo, Wilson Kimutai Mungung’ei, Brenda Kokoi and Zipporah Kering as independent directors,” the notice read in part.
Though seen on one hand as an attempt to turn around the loss-making Nairobi Securities Exchange (NSE)-listed national electricity distributor, the move, unfortunately, also comes with lots of political undertones.
Out of the board of 12, only the CEO Bernard Ngugi, chairman Mahboub Maalim and Company Secretary Imelda Bore have remained, together with four seconded by the government. They are CS Treasury, PS Energy and two alternative directors from the two ministries.
Kenya Power is 50.1 per cent owned by the government and is the sole retail distributor of power in the country. Insiders privy to dealing at the power behemoth told Business Hub the move is part of a wider scheme to get rid of players associated with past infamy (ill repute).
They follow another board member, then Kenya Power Managing Director Ken Tarus who was unceremoniously ousted over corruption allegations. His arrest and ouster were opposed byEnergy Cabinet Secretary Charles Keter even as he was eventually bundled out of the corner office.
Kenya Power had lost over Sh35 million in power tokens irregularly sold to customers between January 2018 and February 2019, according to a brief to the Energy Committee at the Senate, revealing damning details of how thousands of Kenyans were duped into purchasing irregularly issued tokens.
Analysts watching over the NSE listed firm said the resignation by the five board members is extraordinary.
“It is not every day that five alternative directors of a listed firm resign in that fashion,” said Gerald Muriuki, an analyst at Genghis Capital.
He said that the stock market has lost only one shilling following the announcement meaning, “investors are in a wait-and-see situation.”
“Either market is still trying to digest the information on whether they resigned voluntarily or were forced out.
We will wait for the next couple of days. But this is a company that is used to bad news and has grown thick skin,” he added.
The firm which last paid a dividend in 2017 has turned into a loss making outfit. It has been on a downward path, mostly attributed to corruption and poor management, which has also seen several managers lose jobs.
Net profit for the six months ended December declined 71.8 per cent to Sh693 million, showing trouble started even before Kenya announced its first case of coronavirus on March 13.
During a meeting at the Senate, Energy Cabinet Secretary Charles Keter said Kenya Power had spent on staff while creating shifts to achieve social distancing during the pandemic.
“The increased cost was about Sh1.2 billion arising from increased activities in support of critical services and in procuring materials and equipment necessary to facilitate uninterrupted staff operations,” Keter told Senators.
However, in what could be a result of too much political influence into the boardroom, some of the directors pointed an accusing finger to politics.
Former Nandi Woman Representative, who is among the directors who resigned, Zipporah Kering posted on her social media platform saying: “My resignation is all about political witch hunt on course”.
“We shall overcome,” added the former URP representative who is perceived to be allied to Deputy President William Ruto.
These are among pointers being linked to a possible dying political alliance with President Uhuru Kenyatta and was first felt after the July 22, 2019 arrest of National Treasury Cabinet Secretary Henry Rotich, after he was accused of corruption.
The move has seen several appointees said to be close to the deputy president being shown the door in various sectors.
Speaking to Business Hub, however, Brenda Kikoi who is one of the directors who resigned tactfully played down the issue saying: “I completed my three years at Kenya Power. This was a personal decision.”
In its statement, however, the board said the company sincerely appreciated the directors for their commitment and dedicated service and wished them the best in their future endeavours.
“The Company would like to sincerely thank the Directors for their commitment and dedicated service, and wishes them the best in their future endeavors,” the board said in the notice.
The board is expected to be constituted soon to enable the firm quickly get back to it’s feet and ensure that the CEO works with a team that can deliver.