Kiereini bows out after a 24 year term as chair of brewery
Mr Jeremiah Kiereini. The capital markets regulator on Monday said that Mr Kiereini’s directorship in companies listed on the Nairobi Securities Exchange (NSE) had become untenable after he was accused of stashing facilitation money from CMC contracts in offshore accounts.
One of corporate Kenya’s most enduring operatives Jeremiah Gitau Kiereini Thursday left East African Breweries Limited, ending a boardroom career that spanned more than 20 years.
A statement sent by the brewer to the Nairobi Securities Exchange (NSE) said Mr Charles Muchene, a former executive at consultancy firm PricewaterhouseCoopers, had replaced Mr Kiereini “with immediate effect”.
It was not clear whether the CMC board wars had played any role in Mr Kiereini’s exit from the brewery but observers were quick to point out that the framing of the letter announcing his exit was curious.
“People do not retire from chairing corporate boards with ‘immediate effect’ as was said of Mr Kiereini’s exit,” said a corporate governance consultant, who requested not to be named because of his dealings with EABL “Directors ordinarily exit boards at the Annual General Meetings by declining to stand for re-election,” said our source, pointing to the fact that the August date for the brewers AGM is only six months away.
Mr Kiereini has walked the Kenya corporate scene like a colossus since he quit as Chief Secretary to the Moi regime in 1984. Widely viewed as one of Kenya’s oligarchs, his fortunes appear to be heading south since the vicious boardroom war broke out at CMC where he has been accused of stashing the company’s money in secret foreign accounts. Mr Kiereini’s exit could also be part of a wider plan by UK brewer Diageo to stamp its authority in the firm since acquiring the majority stake three years ago.
That plan has seen a number of top executives get replaced by expatriates such as Geoff Biggs (sales director), Adesola Sotande (head of finance), Mark Abbey, (group controller), Cephas Alfebuameh (operations director) and Edmunds James (group legal counsel).
Mr Kiereni has in the past six months had to fend off allegations that he together with former CMC chief executive Martin Forster, operated illegal offshore accounts worth more than Sh250 million.
The money was allegedly accumulated in concert with suppliers who overcharged CMC on invoices and wired the money back to the duo along with other senior employees in a span of 26 years.
The existence of the cash was first revealed last year by CMC’s new CEO Bill Lay, prompting a forensic audit by South African firm Weber Wentzwel that was commissioned by the Capital Markets Authority (CMA).
The report is yet to be concluded after CMA directed the auditors to conduct further investigations.
The regulator has however discussed a summary of the report with the directors of CMC and signalled its intention to shake up the motor dealer’s board based on its findings. (READ: Regulator stokes CMC board wars with ouster of directors)
Mr Kiereini’s exit from CMC was not linked to the off-shore accounts but was rather instigated by other directors and shareholders who had disagreed with him over strategy.
In a board meeting on March 28 2011, the directors demanded the chairmanship from Mr Kiereini, making him the second director to be forced out after the sacking of Mr Forster a few days earlier.
Mr Muchene, who has replaced Mr Kiereini, has worked for CMA and PwC.
Mr Kiereini became the darling of the private sector after serving in the Civil Service for 30 years including a stint as the head of Civil Service and Secretary to the Cabinet.
The position is one of the most powerful in Kenya government and he is thought to have used it to position himself for a big role in corporate scene.
Mr Kiereini was appointed chairman of the Kenya Breweries Board (KBL) in 1988 and would transit into EABL Group chairman when Diageo took control of the firm after a rights issue in 1997.
It was after the Diageo influence and stake grew that the firm engaged in one of the most bruising market competition, dubbed “Beer Wars” with the South African Breweries (SAB), the predecessor of the better muscled London-listed SAB Miller group currently itching to get back into the market. SAB’s Castle Brewing Limited closed their Thika plant ahead of the 2002 Budget following a barely ethical battle for the market, where Jingoism was not spared as a marketing tool, with 800 jobs evaporating on a single day.
However, the scenario has not been repeated since the entry during the Kibaki era of the Keroche Breweries and boutique Sierra which are quickly carving themselves niches.
He has served on the boards of Unga, CMC Holdings, CFC Stanbic, Heritage Insurance and CFC Life.
Amongst those who are unlikely to mourn his apparently dwindling fortunes in public life is current Chief Justice Willy Munywoki Mutunga. On August 6, 1982 as the Kenya Army dealt with remnants of the August 2 coup plotters, Mr Kiereini signed an order detaining him without trial.
Also locked away on the same day without any reason given was politician Michael Koigi Wamwere.
