Safaricom has dropped former President Uhuru Kenyatta’s ally John Ngumi as its board chairman, six months after he took charge of East Africa’s most profitable company, in a fresh board shake-up seen to align the firm with the new administration.
The telco on Thursday revealed the resignation of Mr Ngumi, a career banker as a director of the company and chairman from December 22.
Mr Ngumi was seen as a blue-eyed boy in the Uhuru administration in which he was handed chairman positions in cash-rich parastatals, among them the Industrial & Commercial Development Corporation (ICDC), which was in charge of the Kenya Transport & Logistics Network that had Kenya Ports Authority, Kenya Pipeline Company Limited and Kenya Railways Corporation.
Safaricom said in a statement “He has steered the company through a general election and supported the entrenchment of our purpose of transforming lives through our products and services as well as within the communities we serve.”
The telco which was awarded the top taxpayer award in the financial year ended March 2022 after remitting Sh124.7 billion in duties, taxes and licence fees, did not name a successor, only offering that the new chairman will be elected by the board in the coming weeks.
In the new board changes, Safaricom also appointed Adil Arshed Khawaja, an advocate of the High Court of Kenya as a director of the board.
The telco says the appointment done with effect from December 22 was approved by the board on January 5.
The firm says Mr Khawaja, who currently serves as the managing partner at Dentons Hamilton Harrison & Mathews, has over 30 years of experience in the legal profession ranging from dispute resolution to commercial and real estate.
“He is recognised as a leading name in the Kenyan legal profession and has been globally recognised in various practice groups as one of the most sought-after lawyers in Kenya,” Safaricom said in a statement.
Mr Adil previously served as a director of KCB Group and was elected the first chairman of KCB Bank Kenya Limited.
The appointment puts him in a pole position to become the next board chairman if the firm decides to go for an outsider.
The changes now cut shot the reign of Mr Ngumi, who was one of the favourite board appointees to cash-rich parastatals in the Uhuru administration.
Mr Ngumi was the chair of the board of the Industrial and Commercial Development Corporation (ICDC) and also served in a similar capacity on the inaugural Board of Konza Technopolis Development Authority (KOTDA) and has served as the Board Chair at the Kenya Pipeline Company Limited (KPC).
The Ruto administration has been eyeing to use Safaricom’s platforms to support its Hustler Fund loan programme as well as the fertiliser distribution plan.
This comes at a time when more than half of Safaricom’s executives have quit the telco over the past two years, allowing CEO Peter Ndegwa who replaced Bob Collymore in April 2020 to build his own team.
Eight executives occupying the 11 C-suite seats at Safaricom have recently left for roles outside the firm or at British Vodafone and South Africa’s Vodacom—which have a combined 40 percent stake in the Kenyan company.
This has allowed the firm to tap new skills in Kenya’s evolving telecoms market and shape the management in line with Mr Ndegwa’s strategy that seeks to maintain Safaricom’s profit trajectory.
The changes in the corner office come at a time Safaricom’s mobile money platform M-Pesa has overtaken voice to become the biggest revenue earner for the company, underlining the growth of the financial service that was launched in 2007.
Top executives who have exited Safaricom include Sylvia Mulinge (chief customer officer), Debra Mallowah (chief business development officer), Joseph Ogutu (chief special projects) as well as Kris Senanu and Rita Okuthe, who were chief enterprise business officers.
Safaricom’s net profit for the six months ended September fell by 10 percent to Sh33.5 billion on the impact of a cut on the mobile termination rate (MTR) and higher costs associated with the entry into Ethiopia.
Total revenue rose by 4.6 percent to Sh153.4 billion in the period, helped by an 8.7 percent increase in M- Pesa revenue to Sh56.9 billion, and an 11.3 percent jump in data earnings to Sh26.3 billion.
Voice revenue fell by 3.8 percent to Sh39.9 billion, while total costs rose by a third to Sh31 billion, largely on the back of the firm’s investment in its new Ethiopia subsidiary.
