Companies

Kenya Power CEO replaced amid fight over tenders

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Mr Bernard Ngugi. FILE PHOTO | NMG

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Summary

  • The electricity distributor Wednesday announced the exit of Bernard Ngugi, cutting short his three-year term that was to end in October 2022.
  • Sources familiar with Kenya Power’s affairs told the Business Daily that Mr Ngugi departed over differences with the Vivienne Yeda-led board that was chosen in November last year.
  • The source said the new board took an active role in management, including querying procurement decisions and dropping management’s strategy to increase tariff rates

Kenya Power #ticker:KPLC has lost its fourth CEO in four years amid a boardroom fallout that came months after the court dismissed a petition to remove him over past procurement dealings.

The electricity distributor Wednesday announced the exit of Bernard Ngugi, cutting short his three-year term that was to end in October 2022 and replaced him with insider Rosemary Oduor in an acting capacity.

Sources familiar with Kenya Power’s affairs told the Business Daily that Mr Ngugi departed over differences with the Vivienne Yeda-led board that was chosen in November last year.

The source said the new board took an active role in management, including querying procurement decisions and dropping management’s strategy to increase tariff rates that officials believed would lift Kenya Power out of the red.

“The board came with the mentality that Kenya Power is rotten and they have to clean the company. Their main focus has been on tenders where the board has been micromanaging,” said the source.

“There has been bad blood between the board and the management and little is moving. Two months ago, the board sat to remove Mr Ngugi but there was a split.”

Ms Yeda has said that the company’s previous scandals were enabled by a lack of institutional controls.

“The absence of a robust institutional framework created a vacuum, which inevitably was filled by all types (of people) who, for instance, drove Kenya Power into becoming a veritable procurement machine,” Ms Yeda recently told shareholders at firm’s AGM.

Those comments appeared to be an indictment on former Kenya Power bosses, including Mr Ngugi, who was in charge of procurement when the firm signed a contract with a private company for the supply of transformers, which turned out to be faulty.

The Employment and Labour Relations Court in November 2020 dismissed a petition to remove Mr Ngugi from office due to integrity issues relating to the procurement of transformers when he was the general manager for supply chain.

The petition was dismissed on the basis of a defective affidavit.

Mr Ngugi was one of the few senior managers who remained at the firm after a procurement scandal forced out 10 others, including his predecessor, Ken Tarus.

Mr Tarus, his predecessor, Ben Chumo and other senior managers were in July 2018 charged with abuse of office for allegedly entering into a contract with a private firm for the supply of transformers, which turned out to be faulty.

Prosecutors said the deal also flouted procurement rules for State entities. Mr Ngugi’s exit now deepens the management instability at the power monopoly that last year sank into the first loss in 17 years.

“I take this opportunity to thank Bernard Ngugi for his dedicated service to the company, and wish him all the best in his future endeavours,” said Ms Yeda.

Mr Ngugi, who had worked at the firm for over 32 years, was appointed CEO on October 2019.