Top managers suspended in parastatal graft probe

Seven top managers of the Postal Corporation of Kenya have been suspended to pave way for a graft investigation.

A forensic audit in the corporation’s money transfer service is said to have implicated the senior officials in “gross mismanagement and fraud” leading to their suspension.

Among the officials suspended are the general manager in charge of Information Technology, Mr Tom Agutu, his Emergency Mail Services counterpart and Finance and Agency Services general manager, Sally Wainaina.

More heads are expected to roll as investigations continue. 

The Postmaster-General and chief executive officer Fred Odhiambo (pictured right) immediately dismissed reports that he had been replaced by his boss, the Information and Communication Permanent Secretary Bitange Ndemo.

“We are working together with the PS,” he said

At the centre of the controversy is the parastatal’s lucrative money transfer service, PostaPay, which the auditors described as “highly profitable” but prone to a number of control issues that employees could have been taking advantage of.

The investigation by Deloitte questioned PostaPay’s profitability compared to international money transfer services and poked holes in the system’s integrity.

Although the Postmaster General admitted that the audit had uncovered a loss of Sh2.4 million, he said it “had not highlighted any major fraud.”   

“It was only Sh2.4 million that was lost and that was a matter that had already been dealt with by the board,” said Mr Odhiambo.

According to him, PostaPay has transferred over Sh10 billion since its inception in November 2006.

Money transfer

Through the money transfer service that also competes with Safaricom’s M-Pesa and Zain’s mobile commerce platform, Zap, Postapay transfers an average of Sh400 million a month.

Mr Odhiambo said that the corporation earns a net commission of Sh34 million a month from the service and charges between Sh17 and Sh25 for every transfer.

“This is our fastest growing business stream that continues to attract respected and strong brands in the market,” Mr Odhiambo was quoted saying last year after signing a subscription payment agreement with the collapsed pay television service, GTV.

He further downplayed the temporary suspensions but could not give a date when the managers would resume duty.

“We have to get the board of directors together first then we may meet this Friday to discuss the staff,” he added.

Though the suspended managers remain locked out of the company’s premises after last week’s dismissal, an informed member of staff who cannot be named for lack of authority to speak to the press, revealed that one of the managers had sneaked into the building over the weekend.