Kenya Power shareholders have agreed to legal action and asset recovery from employees found to have used their official positions for personal benefit.
This is in the wake of forensic and lifestyle audits being pushed by the company, as part of reforms to seal revenue leaks mainly through procurement processes, and improve the company's bottom line.
The lifestyle audit is in line with recommendations by the Presidential Task Force on Power Purchase Agreements, which released its report on September 29, advising on a number of measures to bring down the cost of power and streamline operations at the company.
Poor financial performance has seen shareholders go for four years without dividends, something management wants to change with the ongoing reforms.
“The ongoing reforms, spearheaded by the board, are geared towards delivering sustainable profitability for the business and ultimately guaranteeing a steady growth in shareholder value in the short term,” chairman Vivienne Yeda notes.
Ninety nine per cent of shareholders who attended the company's Annual General Meeting on Friday, 99 per cent endorsed legal action and seizure of assets of those found to have been involved in fraudulent deals.
“That the board of directors takes all possible legal action against all persons, employees of the company, suppliers and any other persons, found to have been involved in conflict of interest between their duties and the company’s business thereby causing loss and damage to the company,” read part of the resolutions.
The resolutions shared with the Nairobi Securities Exchange yesterday also shows shareholders voted that the company “should pursue legal action with a view to undertaking a surcharge against the employees, including the past senior executives and other senior persons who have served in management in the company.
National Treasury holds a majority stake of 50.1 per cent.
Together with other 19 shareholders, mainly nominees through banks and investment vehicles, they control a 63.5 per cent stake valued at about Sh4.9 billion.
This is on 1.9 billion ordinary shares at Sh2.50 each.
Other shareholders hold a 36.5 per cent stake, which includes wealthy individuals.
Total shareholders as at June 30, 2021 were 30,758.
Those that have approved the tough action owns 1.06 billion of the ordinary shares in the company.
Kenya power last month announced it was to conduct various internal forensic audits, including a lifestyle investigation of its staff, spouses and close relatives.
The lifestyle audit was however on November 19 halted by the Labour Court, which issued temporary orders pending the hearing of a case filed by the Kenya Electrical Trades and Allied Workers Union.
KPLC was directed to file its response to the application on or before the close of business on December 7, 2021, ahead of the hearing that will be on December 9.
Last week, the company sent five senior managers on a 60-day compulsory leave as part of the audit process.
“The five managers will proceed on sixty days leave with immediate effect to pave way for various forensic audits and the review of the supply chain function to be completed,” acting managing director Rosemary Oduor said.
Last month, the utility firm suspended all 59 procurement and supply chain heads to pave way for a forensic audit to identify areas of possible revenue leakages.
