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Economy

Why Kenya Airways fired its suing finance chief



Mr Alex Mbugua. PHOTO | FILE
Mr Alex Mbugua. PHOTO | FILE 

Kenya Airways has been stopped from hiring a new finance director after former boss Alex Mbugua claimed that he was sacked for raising the red flag on suspicious ticketing and suggesting a review of the airline’s deal with Dutch KLM.

Justice Monicah Mbaru Thursday ruled that the national carrier will have to wait until April 28 when she decides whether or not Mr Mbugua should be reinstated as his suit proceeds.

Mr Mbugua has claimed in his wrongful dismissal suit that he was terminated for raising the alarm over irregular ticketing practices in some overseas stations such as London, and for recommending a review of KQ’s relationship with Dutch national carrier, KLM.

He has sued the national carrier in a bid to reverse its decision to fire him on January 18 for alleged underperformance. The national carrier’s decision followed its record Sh29.7 billion pre-tax profit recorded in the 2014-2015 financial year.

In a past interview with the Business Daily, Mr Mbugua denied that he had been sacked but declined to state what had transpired.

“I had expressly advised the board that there were potentially huge losses in some overseas stations including London through irregular ticketing and that the relationship between KLM and Kenya Airways was exposing it to losses and the same needed review. My proposal was not taken positively by the people who engineered my sacking ,” Mr Mbugua says in court filings.

Kenya Airways has defended its move to sack Mr Mbugua, as it holds that the former finance director intentionally skipped an urgent performance review meeting before the human resources committee on January 18, which was conceived as insubordination hence his sacking.

KLM is Kenya Airways’ second largest shareholder with a 26.73 stake. The two airlines also have a cooperation agreement that sees them do joint marketing for each other on some routes, including Nairobi-Amsterdam, Nairobi-Paris and Nairobi-London.

The former finance director has insisted that the massive Sh25.7 billion pre-tax loss was because CEO Mbuvi Ngunze and former commercial director Gerard Clarke failed in their duties of ensuring the airline collects the revenues targeted for the financial year.

Mr Clarke resigned in October following the announcement of the record loss.

Dick Murianki, who served as the general manager for the airline’s cargo business, replaced Mr Mbugua in an acting capacity until a substantive finance director is recruited.

The airline however says the review was to be done on all top managers, and that Mr Mbugua had been informed of the decision by the chairman of the board of directors, Ambassador Dennis Awori.

“Mr Mbugua spurned the opportunity to present everything that he now seeks to put before the court. We are currently hamstrung by the orders restraining Kenya Airways from continuing with its search for a new finance director. Kenya Airways has already lost confidence in Mr Mbugua,” said John Ohaga, KQ’s lawyer.

Mr Mbugua reckons that he skipped the meeting because the human resource committee declined to furnish him with the list of allegations against him and crucial documents he had requested a few days before his sacking which he says would have proven that he was a competent finance director.

“Without responding to Mr Mbugua’s letter of January 15, the HR committee purportedly went ahead with the scheduled meeting on January 18 and proceeded to terminate his employment with immediate effect,” Mr Mbugua’s lawyers Richard Kamotho and John Njomo argued.

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