Wangusi says CA directors wanted bribes from Airtel

The disbanded Communications Authority of Kenya (CA) board’s demand that telecoms operator Airtel pay a Sh2.1 billion licence renewal fee was motivated by the quest to extort bribes, Francis Wangusi, the agency’s director-general, said Wednesday.

CA chairman Ngene Gituku also told journalists at a Press briefing that the authority had evidence to support the claim that a board member went to Airtel to solicit bribes in exchange for a favourable decision on the licence fee.

The two turned the heat on the disbanded board, whose directors have in the past told the media that they were being fought because of their insistence that Airtel must pay the Sh2.1 billion for a 10-year frequency spectrum licence following the expiry in February 2015 of the permit it was granted in 2000.

Airtel, which paid a $55 million (Sh4.7 billion) fee for its initial 15-year licence, has since moved to court to challenge the demand that it must pay Sh2.1 billion renewal fee.

The telecoms operator argues that the CA had initially agreed to waive the renewal fee, when approving Safaricom and Airtel’s joint buyout of Eassar’s yuMobile’s assets.

Mr Wangusi Wednesday said that based on the commitment made the authority had made to Airtel and the bribery allegations, Airtel was likely to win the case it has filed against the CA in court – an outcome that would expose the regulator to massive financial loss.

“The CA received a letter addressed to the Director -General complaining that one of the CA directors had solicited bribes from the telecoms operator in exchange for facilitating a review of licence fees payable to the authority,” Mr Gituku said.

“That letter is in our records and the matter is under investigation. We deeply regret that the ex-board member is now blaming corruption at CA in respect of Airtel’s licence fee for his woes with the authorities,” he added.

Mr Wangusi claimed it was the first time in the history of the CA that board members were being accused of corruption, adding that some members of the disbanded board had been soliciting for tenders and falsifying mileage claims.

“There is evidence that they (board members) insisted that Airtel pays the license fee because they did not receive the bribe they had demanded,” he said.

Mr Wangusi said demands to be awarded tenders and falsification of mileage claims had raised serious governance and credibility questions on the disbanded board, making its dissolution inevitable. 

The disbanded board members’ demand that Airtel pays the licence renewal fee was in direct contrast to their predecessors’ decision to exempt the telecoms firm from paying the fee.

READ: Airtel founder meets Uhuru amid Sh2.7 billion licence row

Mr Gituku, who chaired both boards, however insisted that the demand that Airtel pays the fee still stands because it was a board decision.

The CCK board’s decision to exempt Airtel from paying the fees hinged on legal advice, which stated that the authority did not include settling of initial frequency spectrum licence fees in the conditions it set for Airtel when the telecoms operator was acquiring Essar Telecom’s properties.

Mr Wangusi, Mr Gituku and the then Information PS Joseph Tiampati, supported that position.

The board however argued that the position had no basis because Airtel never acquired any frequency spectrum from Essar to benefit from such a waiver.  

On March 27, 2014, the board to overturned the decision of preceding board and insisted that Airtel pays for the licence renewal fee of $27 million.

“The Authority immediately charges M/S. Airtel the sum of $27 million for licence renewal and spectrum assignment, noting that there were reconciliations to be made based on payments already made,” the board said in a letter to Airtel.

The dispute over the impending renewal of Airtel’s licence arose from the pre-conditions the CA board set for Airtel and Safaricom’s acquisition of Essar Telecom’s assets.

Key among the requirements was that the two mobile operators pay $5.4 million for variation of the licence terms.

The operators needed the variation to synchronise the acquired assets.

Airtel maintains that the CA had agreed to synchronise the licence with the assets acquired.