We must take urgent steps to restore the autonomy and independence of the Communications Authority of Kenya (CA). For now, let’s wait to see what independent auditors investigating the controversy surrounding the authority’s mortgage scheme will unearth.
We are waiting to see whether the probe will reach the same conclusions and ascribe corruption and criminal intent to some of the allegations contained in the widely published board audit report on the scheme.
For me- and having gone through the audit report keenly, I think that it is a public outrage that the board of the authority wants to decimate the whole executive suite of this critical regulatory authority, including the director general, director of human resources, director of legal services, director of finance and the internal auditor- all at a go, and on the basis of findings of an audit conducted on grounds of patently shaky assumptions.
Even in transactions with banks, you will find many cases where different property valuers end up with different figures for the same asset.
A valuation is a professional opinion. Who said that a valuation conducted by a government valuer is the law?
Yet the whole board audit of the CA’s mortgage scheme is premised on the assumption that the valuations conducted by the Ministry of Lands is the law of the land and, therefore, criminal intent must be ascribed to any transaction conducted at prices above valuations by State agents.
It may very well be the case that some employees of the authority have been colluding with valuers to inflate valuations so they can own houses well above their pay cheques.
But even if property values were inflated, it is the employee who ends up bearing the brunt.
As an employee of the authority, you are the one who pays the inflated price. Where is criminal intent? Where is corrupt behaviour in this? Let’s wait and see what the independent investigations will reveal.
If anything the manner in which the whole board audit process was conducted leaves it wide open to charges of discrimination and bias against targeted employees. Is it conceivable that one can do a transparent and fair corruption investigation by sampling the workforce?
How do you design and arrive at a sample size in a corruption investigation? And, why rush to mete out punishment and send officers on leave on grounds of unproven allegations, before determining whether there are bigger culprits in the bigger population you have left out in your sample?
I don’t hold brief for the Secretary to the Cabinet, Mercy Wanjau, but does failure to service a mortgage equal corruption when the title of the property is still under the custody of the authority?
Mr Ezra Chiloba’s biggest sin is that he more or less sold the property to the scheme and then took out a mortgage on it. I can’t wait to see what the independent investigation will reveal in his case, especially in the context of property transactions called ‘equity releases’.
It starts like this: A staff of a company-sponsored mortgage scheme changes jobs and discovers that his new employer has a superior scheme.
Because he is about to finish servicing the mortgage under the previous employer’s scheme, he sells the property to the new scheme and takes a new mortgage. Indeed, equity releases are commonplace in the private sector.
The telecommunications sector is critically important for us. This is the biggest taxpayer in the country.
The sector is the only place that counts more than 90 percent of the adult population as its customers- a feat that even banks cannot claim to have achieved. This is the sector that gave Kenya global leadership in mobile banking.
Our problem is that we treat the sector’s regulator as just another parastatal in whose board we can dump failed politicians and bureaucrats with no clue about the regulatory challenges facing the industry.
Currently, three principal secretaries or their representatives- sit on the board of the CA as ex officio members representing the National Treasury, the Ministry of Communications and the Ministry of Internal Security.
Thus, we are in a situation whereby the principal secretary will sit on the board — participate in all decisions made by directors and management- only to make an about—turn later and demand disciplinary action against the management for the very decisions he participated in making.
The CA sits on a Universal Service Fund from public levies collected from consumers of telecommunications services. Right now, the fund is at Sh18 billion. This is what the eating chiefs could be targeting.
The writer is a former managing editor, The East African.