MPs stop JKIA takeover, say deal suspicious

STIFF COMPETITION: A Kenya Airways plane at the Jomo Kenyatta International Airport, Nairobi.
STIFF COMPETITION: A Kenya Airways plane at the Jomo Kenyatta International Airport, Nairobi.

The plan by Kenya Airways to take over the management of JKIA was crafted by top government officials, Parliament heard yesterday.

During the heated discussions, Kenya Airports Authority chiefs laid bare the behind the scenes machinations that confirmed fears that there were powerful forces pushing the deal.

Minutes of a KAA board meeting suggested that the instructions to execute the takeover were from “a high office.”

The minutes also showed that Commercial Bank of Africa (CBA) CEO Isaac Awuondo, who is also the chairman of KAA, declared his interest by announcing that the bank has shares in Kenya Airways.

Kiminini MP Chris Wamalwa asked the KAA chairman to step down citing glaring violations of laws guiding conflict of interest.

The Public Investments Committee has, hence, halted all transactions regarding the takeover until the matter is resolved.

Further, the committee asked KAA to recover Sh15 million that was paid to the transaction adviser – MMC Africa, which was a down payment for the Sh150 million advisory contract.

The firm was hired to devise the takeover plan which has sparked protests among Kenyans citing fears of losing Sh8 billion in revenue.

PIC chairman Abdulswamad Nassir said the committee would do a formal communication to the House regarding the decision.

“We ask the Office of the Auditor General to probe the proposal and any communication associated with it,” he said. In his presentation, KAA CEO Jonny Andersen said the deal was birthed through a letter from the Transport ministry which notified the authority of a Cabinet resolution approving the deal.

The June 19, 2018, letter was signed by Transport PS Paul Maringa and copied to Kenya Airways CEO Sebastian Mikosz. MPs questioned the ‘convenient coincidence’ in another letter – a follow-up, by Infrastructure PS Esther Koimet asking KAA to expedite the request fronted by Maringa. It was on the same date – October 5, 2018, that KQ presented the proposal – fully approved by the board, for a Public Private Investment Partnership (PPIP) with KAA towards improving aviation services in the country’s largest airport.

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The lawmakers pushed Andersen to disclose whether he saw the Cabinet memo – cited as CAB ( 18 ) 28 in the letter from the PS, and whether he responded.

This was after KAA failed to present any communication or replies to the instructions they were receiving from the ministry and other parties in the deal.

“I did not see a Cabinet memo. I was told it was confidential. It was in a meeting with the PS where we were informed the Cabinet memo exists,” Andersen said.

“If we knew of a proposal, we would have conducted due diligence from both sides. The transaction involved here was complex, hence, our decision to hire an adviser.”

MPs further dwelled on who specifically issued instructions or allowed Kenya Airways to enter into negotiations with KAA with focus being on who requested the approval.

“Who generated the interest? Why was Koimet letter issued the same day that KQ presented the PPIP? The speed at which the deal is being executed casts a lot of doubt,” Nassir, Mvita MP, said.

The other question was on why the deal was being treated with such urgency.

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