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Corporate

KQ staff suspended over loss of cash

KQ enlisted the help of Deloitte in February to review its operations with the aim of identifying and plugging cashflow leakages. PHOTO | FILE
KQ enlisted the help of Deloitte in February to review its operations with the aim of identifying and plugging cashflow leakages. PHOTO | FILE 

National carrier Kenya Airways has suspended a number of senior staff over their alleged involvement in pilferage of funds at the cash-strapped airline.

The airline took the action upon receiving the initial report of a forensic audit it ordered in February to look into financial decisions and practices in the past five years.

The audit by consulting firm Deloitte, identified six individuals who took advantage of “system and internal control weaknesses” to enrich themselves.

The Business Daily established that the majority of the individuals worked in KQ’s finance department and were asked to step aside to enable Deloitte conclude investigations that may result in criminal proceedings.

“The company is evaluating the findings with a view to taking further action against culpable staff, including potential criminal prosecution and recovery proceedings, as appropriate,” KQ said in a statement.

Kenya Airways, which has posted losses for three consecutive years, enlisted the help of Deloitte in February to review its operations with the aim of identifying and plugging cashflow leakages.

Deloitte is also interrogating governance weaknesses in the airline and the prudence of its capital expenditure decisions since 2011, including the ambitious but ill-fated Project Mawingu fleet expansion plan.

KQ chairman Dennis Awori said he expects Deloitte to submit a final report to the board of directors by Wednesday next week.

“Investigations have revealed financial misappropriation in the business and that is why some employees have been suspended as investigations continue,” Mr Awori said in an interview.

The national carrier reported a Sh25.7 billion after-tax loss for the year ended March 2015, followed by a Sh10.95 billion net loss for the six months to September.

Kenya Airways, which is listed at the Nairobi Securities Exchange, is in a negative equity position of Sh33.9 billion while its revenues have remained flat, impeding its rebound to profitability.

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