Kajwang’ strikes Bill Lay with work permit revocation order
Mr Bill Lay, CEO CMC Motors
Embattled CMC Motors chief executive Bill Lay on Tuesday sank into deeper trouble after the Immigration minister ordered that his work permit be revoked – a move that would effectively oust him from employment with the auto dealer.
Immigration minister Otieno Kajwang’ issued the order in a letter dated December 20 to the director of Immigration Services.
Mr Kajwang’, who admits issuing the May 30 directive that gave the CMC chief executive a work permit, says in his latest memo that the decision was informed by recent developments at the motor dealer since Mr Lay, a US citizen, assumed its leadership.
He said Mr Lay’s short tenure had sparked vicious boardroom wars in the firm, leading to suspension of its shares from trading at the Nairobi Securities Exchange.
“I hereby direct that you revoke his permit forthwith until (CMC’s warring shareholders) sort out their internal management problems and until they advise us otherwise.”
CMC chairman Joel Kibe reacted angrily to the decision with a long letter to the minister asking him to reverse his decision. Mr Kibe has accused Mr Kajwang’ of malice in directing that Mr Lay’s work permit be revoked.
“We are advised by our lawyers that the directive you have issued is capricious, arbitrary, high-handed … and otherwise null and void in law,” Mr Kibe wrote.
Mr Kibe argues that the goings on at CMC are out of Mr Kajwang’s jurisdiction, adding that Mr Lay, who is married to a Kenyan, should have been given a hearing after living and working in the country for 17 years.
The letter also revealed that CMC’s management has sued Andy Forwarders over alleged over- billing of the motor dealer – a sign that the rift between the company’s principal shareholders is far from ending. Mr Kibe is also the de facto leader of a section of the motor dealer’s board that has been fighting with another led by lead shareholder, Peter Muthoka, for control of the company.
Soon after taking office, Mr Lay alleged that Mr Muthoka’s logistics firm, Andy Forwarders, had overcharged the auto dealer billions of shillings in the past five years and has since cancelled Andy’s logistics contract with CMC. Differences between Mr Lay and Mr Muthoka saw seven out of CMC’s nine-member board vote on September 8 to oust Mr Muthoka from chairmanship of the board, replacing him with Mr Kibe. That move has, however, only stocked the boardroom war, taking it out to the courts. (READ: Ousted CMC chairman plots coup against rivals)
Mr Muthoka has a 24.7 per cent stake in CMC, making him the single largest shareholder. Mr Kibe and his business partner, Paul Wanderi Ndung’u, are second with 18.8 per cent. Mr Muthoka has sued Mr Lay accusing him of defamation and called for an extraordinary general meeting where he will seek to kick out Andrew Hamilton, Lay, Kibe, and Ndung’u from the auto dealer’s board.
But CMA has obtained court orders temporarily stopping the EGM. The matter is however still in court where a February 7 date for its hearing. The latest twist to the saga signals a determination by the warring camps to wipe out their rivals in one of corporate Kenya’s most vicious battles. Last month, Parliament was told that Mr Lay was in the country illegally and had gotten his entry permit un-procedurally four days after the Immigration ministry first rejected his application. The allegation came as Finance minister Uhuru Kenyatta tabled a letter showing that Mr Lay was in the country legally, but Ikolomani MP Boni Khalwale said his entry permit was issued four days after an earlier application had been rejected.
On Wednesday, Mr Kibe promised to go to court should Mr Lay’s work permit be revoked, signalling that the auto dealer’s troubles are far from ending.
The Capital Markets Authority, the agency that suspended the firm’s shares from trading at the NSE, has appointed audit firm PricewaterhouseCoopers (PwC) to investigate fraud claims at the auto dealer.
Mr Lay has also come under the spotlight for paying millions of shillings in inflated invoices to Pewin Motors, a firm he hired on his first day at CMC to handle the firm’s sales to government.
Mr Muthoka insists that his removal from the chair of CMC was linked to his opposition to Mr Lay’s decision to cut salaries of 68 senior managers, the Pewin Motors contract and the planned relocation of Land Rover and Volks wagen franchises to Sameer Park.
