Kenya Power has once again locked out outsiders from its top job after the utility monopoly promoted Bernard Ngugi to be the new CEO.
Mr Ngugi, previously in charge of supply chain, takes over from Ken Tarus who was kicked out in July after being charged with conspiring to commit an economic crime and abuse of office.
Before Mr Ngugi's appointment, Jared Othieno had been the acting chief executive since July 16.
Tuesday, the listed firm said the interim management would remain in place for the next three months.
Kenya Power has once again locked out outsiders from its top job after the utility monopoly promoted Bernard Ngugi to be the new CEO.
Mr Ngugi, previously in charge of supply chain, takes over from Ken Tarus who was kicked out in July after being charged with conspiring to commit an economic crime and abuse of office. Before Mr Ngugi's appointment, Jared Othieno had been the acting chief executive since July 16.
Tuesday, the listed firm said the interim management would remain in place for the next three months.
The announcement of Mr Ngugi’s elevation follows a pattern that has seen Kenya Power appoint seven CEOs from within its ranks in a period of 36 years.
The State-owned electricity distributor had in August 23 issued a public notice on recruitment of CEO, raising the possibility that it was considering hiring an outsider to lead its turnaround after it announced a drop in profit for the second year in a row.
“We believe that Mr Ngugi will see the company through an important stage of its development and growth,” said Mahmoud Maalim, the Kenya Power chairman, in a press briefing.
Mr Maalim refused to disclose either the number of outsiders that had applied for the position or those shortlisted for the position that has become volatile in recent years. Yesterday, the company announced a public search for nine general managers to fill a vacuum left by executives who were charged in court alongside Mr Tarus and his predecessor, Ben Chumo. Mr Tarus and the other executives are accused of entering into a contract with a private firm for the supply of transformers, which turned out to be faulty. Prosecutors argue that this deal also flouted procurement rules for State entities. The suit is still ongoing but Kenya Power offered the affected managers an exit package running into billions of shillings to allow the firm make fresh hirings. Mr Ngugi, who has worked at Kenya Power for over 30 years, said yesterday that his main priority would be to return the firm to profit growth.
“My immediate focus is to lead the company towards improved profitability while ensuring the business fulfils its socio-economic purpose,” said Mr Ngugi.
The utility issued a profit warning for the year to June, signalling its net profit would fall by more than 25 percent from the Sh1.92 billion it posted a year earlier. This is the second year in a row that will see Kenya Power report a drop in profit after a 3.7 percent fall last year, denying investors any dividend.
After yesterday’s announcement, its shares rose 3.7 percent and closed yesterday’s trading session at Sh3.10 each.
The utility was banking on an increase in electricity prices after a temporary reduction of power charges for 5.7 million consumers expired in July to boost sales and return to profit growth. The firm in August applied for reinstatement of the higher tariffs, but the Energy and Petroleum Regulatory Authority (EPRA) announced that the submission would likely be rejected.
The energy watchdog last year cut retail electricity prices following an order by President Uhuru Kenyatta after widespread complaints from some domestic customers and small businesses about a costly tariff introduced last July. The tariff almost doubled the monthly bill for higher income households, triggering complaints that forced EPRA to cut the tariff from November 2018 to July 2019 to Sh10 per kilowatt hour from Sh15.80 for customers who use below 100 kilowatt units per month.
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