Board to discuss Posta audit

Monday May 11 2009

Former Postmaster General Fred Odhiambo. PHOTO/ FILE

Former Postmaster General Fred Odhiambo. PHOTO/ FILE 


The board of the Postal Corporation of Kenya meets on Tuesday to discuss the interim report by auditors Deloitte Touche on PostaPay.

Also to be discussed is the suspension of seven top managers following an audit of the PostaPay money transfer service.

Board chairman Cyrus Maina told the Nation that the meeting would discuss the interim report by auditors Deloitte Touche on PostaPay.

But, it has since emerged that the managers were hastily removed from office on the basis of incomplete investigations of a draft audit report and without being allowed to defend themselves.

Serious allegations

The timing of the controversy has made the stakes even higher as the contract for the chief executive of the corporation, Mr Fred Odhiambo, ends in three months.

Deloitte and Touche were contracted in October last year to investigate the PostaPay system and determine whether the corporation was getting value from the agreement with the American technical service firm, Afripayments Ltd.

It is also clear from the report that the scope of the investigations was widened later to capture more serious allegations.

The board suspected that some top managers of PCK either had shareholding interests in Afripayments Ltd or had relatives who had shares in the technology supplier.

But in its report, Deloitte said it was unable to prove links between Afripayments and any of the senior PCK managers.

The auditors found that PostaPay was more profitable than any of its competitors in the market.

Thus, although the audit raises important queries about Afripayments, the fact that it did not prove the allegations which the board wanted investigated failed to provide grounds which would have justified the suspensions.

The report has recorded a transaction where PCK nearly lost Sh2.4 million through PostaPay in a transaction involving an employee of Afripayments Ltd.

But Mr Maina said the board would exhaustively discuss the suspension of the seven managers and a letter sent to the Postmaster General asking him to show cause why he should not be sacked.

The board meeting comes in the wake of yet another controversy over the sacking of the vice-chairman of the board, Mr Newton Osiemo for protesting at the manner in which the general managers were sent home by Information and Communications minister Samuel Poghisio.

The vice-chairman had written to Mr Poghisio accusing Mr Maina and Permanent Secretary Bitange Ndemo of not following procedure over the money transfer service.

Mr Osiemo says that a board meeting held on April 20, to discuss the Deloitte report, was unprocedural because PCK’s chief executive and the corporation secretary, Mr Julius Shigoli, were denied entry into the boardroom yet they were not adversely mentioned in the forensic audit.

Final document

“Independent board members and I strongly defended the position that we should only act on a final document and after giving management an opportunity to respond to this report,” he adds.

But, Mr Poghisio accused Mr Osiemo of being implicated in the PostaPay transfer saga. And even as he sacked Mr Osiemo from the board, yet another controversy was brewing over the position of another board member, Ms Cecilia Ng’etich, who resigned on August 21, 2008, to contest the Sotik parliamentary seat.

Although Ms Ng’etich lost in the ODM nominations she continued to serve as a board member in contravention of the law that requires civil servants to vacate their positions six months prior to the polls.

The other general managers suspended are Mr Andrew Tanui, Ms Sally Wainaina, Mr Tom Ogutu, Mr Ken Oluoch, Mr Enock Kinara and Mr Christopher Isabwa.