House team wants past, serving CMC board members to be probed

• Committee’s report released on Thursday questions credibility of firm’s directors and chief executive officers
• Team dwelt in particular on actions taken by the current CEO, Bill Lay, whose job they say should be taken by a Kenyan since the assignment does not require any unique skills.
• Report recommends that Mr Muthoka and other Andy directors should not be banned from the board of CMC “until and unless they are implicated in the outcome of further investigations under the Companies Act.”

Serving and past board members of troubled CMC Holdings should be investigated further to establish if they have committed any crimes, a parliamentary committee has recommended.

The Departmental Committee on Finance, Planning and Trade on Thursday released a report on the affairs of the auto dealer, questioning the credibility of its directors as well as chief executive officers.

“Capital Markets Authority and the Director of Public Prosecutions should launch further investigations to establish whether past and present directors and management of CMC have committed any criminal offence,” the committee’s report reads.

The team dwelt in particular on actions taken by the current CEO, Bill Lay, whose job they say should be taken by a Kenyan since the assignment does not require any unique skills.

(Read: MPs question Lay’s tenure at CMC)

“The current and former chief executive officers of CMC should be included in the forensic investigation with respect to their credibility and background information,” the committee says.

The report accuses Mr Lay of assuming a lot of powers that extended to reversing decisions of the board, especially with regard to the review of employee compensation.

It notes that the demotions amounted to a breach of contract, which exposed the company to large monetary claims should the affected employees seek redress.

The Chris Okemo-led committee said that the circumstances under which Mr Lay secured a work permit, within a day after rejection, raises integrity questions. The American expatriate said he got the permit after an intervention from the then CMC chairman, Peter Muthoka, who said he only wrote a draft appeal.

Mr Muthoka said Mr Lay informed him that he had gotten the work permit using his own connections. Immigration minister Otieno Kajwang’ also told the committee that Mr Muthoka did not intervene in his decision to overturn his earlier orders.

The committee noted that Mr Lay failed to rebut allegations of lack of qualifications by providing certified copies of his academic attainments, asking the Immigration ministry to further investigate the matter.

According to Kenya’s labour rules, expatriates should only take up local jobs if they are qualified in skills not possessed by locals, piling pressure on Mr Lay to prove his qualifications.

Saying that Mr Lay could not produce evidence of his academic qualifications, the committee said the CEO appeared to have misled the Immigration ministry, leading to the rejection of the work permit in the first place.

“The Departmental Committee on Administration and National Security should comprehensively investigate the manner in which work permits are issued to foreigners, generally to establish whether the law is being flouted in awarding work permits,” the report reads.

It is not clear whether Mr Lay has a valid work permit or if he is qualified to hold one, after Mr Muthoka told the committee that the Prime Minister’s office intervened for him to secure the certificate.