Drop ‘parent ministry’ idea to keep meddling ministries off State firms
What you need to know:
- The allegations are as follows: First, that she committed the corporation to signing a lopsided deal granting Duffry International, liberal privileges at the expense of the corporation.
- The second allegation against Ms Mbugua is that she varied the contract on the multi-billion Greenfield passenger transport to allow for inclusion of Value Added Tax.
- President Kenyatta must now press harder for urgent implementation of the recommendations of the Mohammed Abdi Kadir-led parastatal reform task force.
The shenanigans and boardroom games playing out around the Kenya Airports Authority (KAA) have once again demonstrated just how low we have sunk when it comes to corporate governance at our strategic parastatals.
Clearly, the new ministers and their principal secretaries are taking too long to shed the mental baggage of the past — the mindset where ministers and permanent secretaries dealt with parastatals as if they were appendages of their ministries.
Last week, the Principal Secretary for Transport, Mr Nduva Muli, stormed into a scheduled board meeting of the corporation and proceeded to kowtow the directors into forcing the CEO, Ms Lucy Mbugua, and two key top managers on compulsory leave.
Mr Muli also bullied the board — all of them appointees of his minister — into ordering an investigation into the terms and circumstances under which the corporation had contracted Duffry International to run a section of its duty free shops.
He came armed with a sheaf of papers, which he tabled before the board to prove the allegations. An arrogant display of raw power of the most blatant type, to say the least. But did Mr Muli really have the powers he was wielding with so much pomposity? That may be debatable.
But it is noteworthy that the State Corporation Advisory Authority, the Office of the President-based body that administers the State Corporation’s Act on behalf of the Head of State, has already ruled Muli and company out of order.
Hardly a day after he put out a letter asking the CEO and the top managers to proceed on leave, the head of the authority, Ms Jane Mugambi, wrote to him, basically telling him that he has no such powers.
She set Mr Muli’s investigations aside and appointed the Inspector-General of State Corporations to investigate the allegations.
Notably, Ms Mugambi decided to widen the scope of the investigations by the Inspector-General of State Corporations, first, to conduct urgent investigations into issues raised during the board meeting and secondly, and perhaps most tellingly, to investigate “the procedures used in requiring the officers to proceed on leave”
Clearly, the boot is moving to the other foot.
ALLEGATIONS
But what are the specific allegations against Ms Mbugua and her top managers and is there truth in the claims?
The allegations are as follows: First, that she committed the corporation to signing a lopsided deal granting Duffry International, liberal privileges at the expense of the corporation.
I have seen two copies of agreements with Duffry International: an earlier agreement containing excessive privileges — and which was subsequently revised and the offending clauses removed — and the actual and formal agreement signed by the parties.
What emerges is that Ms Mbugua is being persecuted for a mistake she — in consultation with the ministry — had corrected many months ago. From the documents Mr Muli tabled, it is clear that the authority is not exposed at all.
I have also seen evidence showing that initially when the offending clauses on the lopsided deal were flagged out — Ms Mbugua even wrote a show-cause letter to the corporation secretary to explain how the offending clauses came about.
Clearly, this first allegation does not hold any water.
The second allegation against Ms Mbugua is that she varied the contract on the multi-billion Greenfield passenger transport to allow for inclusion of Value Added Tax.
I have seen both the agreement, which was signed by both the former CEO, Mr Stephen Gichuki, in September 2012, and the one signed by Mrs Mbugua in November 2012 — including the bill of quantities for the project.
I have also read a letter Ms Mbugua wrote to the National Treasury last December seeking remission for VAT.
Truth be told, this contract has not been varied. Unless the Ministry of Transport can dig up new dirt against her, they have no case against her.
What are the policy implications ?
President Kenyatta must now press harder for urgent implementation of the recommendations of the Mohammed Abdi Kadir-led parastatal reform task force.
This “parent ministry” idea should be dropped, and meddling ministers and their principal secretaries kept very far away from the affairs of parastatals.
