Role of Kibaki’s private secretary as parastatal board chair raises issues

Tuesday September 4 2012



President Kibaki’s private secretary Nick Wanjohi must be an extremely powerful man.

On Tuesday evening at close of business, he visited the offices of the State-owned Numerical Machining Complex and ordered its chief executive, Mr Sammy Onyango, out of office on the grounds that his tenure had expired.

These days, the practice is that all parastatal heads sign performance contracts with their boards. When your term comes to an end, your performance is appraised on the basis of the benchmarks you signed with your board. You are allowed to defend yourself during the appraisal.

If you fail, the board makes a recommendation to the line minister, in this case, Industrialisation Minister Henry Kosgey, not to renew your contract.

But in NMC’s case, the CEO did not sign a performance contract. The board has not been in place long enough to put together a basis for assessing the CEO’s performance. It basically took charge less than six months ago.

The move by Prof Wanjohi has now set the stage for a power-struggle between the President’s private secretary and the Minister for Industrialisation, who appointed the CEO in the first place.

Mr Kosgey has just returned to the office after a long spell, having been cleared of corruption charges. Prof Wanjohi was appointed as chairman while Mr Kosgey was out of office.

That Prof Wanjohi is a very powerful man is reflected in the fact that he is the only civil servant who serves as a parastatal board chairman. Although other civil servants sit on parastatal boards, they only do so as ex-officio members.

Even the circumstances under which he and the board he chairs were appointed were, in themselves, controversial. Until he came into the scene, the practice was that the chairman of the Kenya Railways Corporation automatically became the chairman of the NMC.

This is because NMC, unlike other parastatals, was not established by an Act of Parliament. It was formed as a limited company under the Companies Act.

To date, it has two shareholders: Kenya Railway Corporation with a 51 per cent stake, and the University of Nairobi, with 49 per cent.

This is what is stated in the company’s Memorandum and Articles of Association, which also clearly stipulate how board members are to be appointed.

The former chairman of NMC, Mr Jonathan Mturi, held that position on account of the fact that he was chairman of the Kenya Railways Corporation.

And, upon his retirement, the former Chief of General Staff, Gen Jeremiah Kianga, was appointed chairman of the Kenya Railways Corporation.

He automatically assumed the chairmanship of NMC. He woke up one day to read in a special gazette notice that Prof Wanjohi had been appointed as new chairman.

Indeed, the board Prof Wanjohi chairs is the only one to have been formed without representation from the two shareholders, contrary to what is expressly stipulated in the Memorandum and Articles of Association of the company.

Clearly, the battle for control of this strategic institution is most likely headed to the High Court, with one side pressing the case that the board headed by Prof Wanjohi was illegally constituted and does not, therefore, have the authority to replace the CEO.

Mr Onyango has been a key figure in putting together the vision and strategy for the establishment of an integrated steel mill.

A UK trained materials engineer, it is his work and reports on the proposed steel mill project that caused the Vision 2030 secretariat to put the project among the top flagship projects.

Two years ago, he was appointed by former head of public service, Mr Francis Muthaura, to head a team that visited the country to assess the quantity of iron ore deposits in Kenya.

He is widely recognised as a specialist in his subject. Just the other day, he was invited by the commission investigating the Saitoti helicopter crash to conduct a forensic investigation on the broken pieces of the helicopter.

But perhaps his strongest credential is the fact that he was the engineer in charge during the installation of the existing foundry at the NMC in 1995, the biggest such machine outside South Africa and Egypt.

The parastatal sector in Kenya is the place where powerful individuals test their political mettle. It does not matter how qualified you are.