- One of the five directors told the Star in confidence that they did not resign on their volition.
- His sentiments are coming in the wake of claims that the government, which holds a controlling stake of 50.1 per cent, is keen on reshaping the company.
The abrupt resignation of five independent directors at Kenya Power has exposed what could be deeper turf wars at the state listed electricity vendor.
In a public notice, Kenya Power said Adil Khawaja, Kairo Thuo, Wilson Kimutai Mugung’ei, Brenda Kokoi and Zipporah Kering had tendered resignation but did not state the reason for the abrupt departure.
One of the five directors told the Star in confidence that they did not resign on their volition.
''There is much to this resignation. Personally, I didn’t agree with the board on some of the decisions, however, that is not the reason why I left. Someone mighty influenced our decision,’’ he said.
He added that without independent people on the board, the public voice had been muted.
''The remaining individuals represent commercial interests. I wonder if any replacement is coming anytime soon, considering that an Annual General Meeting (AGM) must be called. Remember, the end year result is still pending,’’ he said.
His sentiments come in the wake of reports that the government, with a controlling stake of 50.1 per cent, is keen on reshaping the company.
The firm that enjoys monopoly in power distribution has been grappling with a confidence crisis, corruption allegations and dwindling revenues.
An independent board member is a non-executive director who does not have any kind of relationship with the company that may affect their judgment.
This technically means, there is no independent eye at the power utility to champion public interest.
Consumers accused Kenya Power of inflating and backdating November and December 2017 bills to recover the Sh10.1 billion-fuel cost charge as had been indicated in the firm’s annual statement for the year ended June 2017. It had so far recovered Sh2 billion, leaving out Sh8.1 billion that was to be passed on to consumers in monthly invoices.
In June, Kenya Power issued its third profit warning in a row, citing reduced electricity consumption due to coronavirus control measures and the rising cost of buying wholesale power from generators.
The alert means the utility’s net earnings will decline by at least 25 per cent of last year’s profit of Sh262 million — the worst in 16 years.
“The Covid-19 pandemic has adversely affected our business operation leading to slow growth in electricity sales and an increase in financing costs resulting in reduced earnings,” said the firm.
Besides diminishing returns, the firm has been dodged with numerous corruption scandals that saw The Director of Public Prosecutions (DPP) authorise the arrest and prosecution of 10 top executives including two former managing directors over Sh4.5billion scam two years ago.
In the same year, the auditor general questioned the validity of the firm’s audited results for 2017, saying they had not been corrected to reflect the company’s true financial position, an unprecedented disregard for good corporate governance practices by a publicly traded firm.
According to the audit report, the firm recognised unbilled fuel costs as revenue, setting off a process that saw it manipulate the reporting of other items in its books in the quest to avoid disclosing lower earnings.
According to then auditor Edward Ouko, the proper reporting would have left Kenya Power with a paltry Sh366.6 million in pre-tax profit for the year ended June 2017, and not the Sh7.6 billion it reported.
The company’s pre-tax profit for the year ended June 2018, on the other hand, should have been Sh6 billion and not the Sh3 billion it reported.