TransCentury appoints ex-KRA boss to its board

Former taxman Michael Waweru has been appointed to the board of TransCentury, deepening the role of top shareholders at the NSE-listed investment firm.

Mr Waweru, who served as commissioner-general of the Kenya Revenue Authority for nearly a decade, begins his term on Tuesday.

Carol Musyoka, who joined the TransCentury board in March 2011 ahead of its listing on the Nairobi bourse in July that year, has quit her position.

The loss-making investment firm has also tapped Dennis Awori to serve as a non-executive director, reflecting increased preference for ex-public servants on boards of Nairobi Securities Exchange-listed companies.

“Mr Michael Waweru has been appointed as a non-executive director with effect from December 1, 2015,” TransCentury said in regulatory filings.

“Carol Musyoka has resigned from the board with effect from November 30, 2015.”

Mr Awori is chairman of three companies – Toyota Kenya, Bank of Africa Kenya and Kenya Airways.

He was Kenya’s ambassador to Japan and Korea from 2003 to 2009. Both him and Mr Waweru also serve as directors at East African Cables, owned 68.37 per cent by TransCentury.

The appointment of Mr Waweru means that board members cumulatively control nearly one third or 28.73 per cent shareholding of the company. Mr Waweru is the second-largest shareholder in TransCentury with a 7.57 per cent stake currently worth Sh212 million.

Other directors with sizeable stakes at the infrastructure-focused investment group include board chairman Zeph Mbugua (4.74 per cent), Peter Kanyago (5.59 per cent), Robin Kimotho (3.87 per cent), Job Kirira (3.37 per cent), Ngugi Kiuna (2.8 per cent) and Joseph Karago (0.79 per cent).

The two new directors are seasoned former public servants with vast political connections.

Mr Waweru currently serves as the chairman of the upcoming Mwai Kibaki Institute, which will be styled along the American presidential libraries.

Mr Awori landed the Tokyo diplomatic job soon after Mwai Kibaki’s Narc won the 2002 polls.

READ: TransCentury’s big owners lose Sh5bn in share price fall

Management experts reckon that listed as well as private firms routinely poach current and former top civil servants to boardrooms in order to benefit from their influence and extensive contacts in the public sector.

“They must have looked and seen that these are individuals who can add value to the organisation based on their knowledge, understanding of markets, influence, contacts and integrity,” said Karugor Gatamah, chief executive of Africa Corporate Governance Advisory Services.

TransCentury’s stock has lost half its value since the beginning of the year to close at Sh10 apiece yesterday, after plunging into the red following a write-off from its recent sale of a 34 per cent stake in troubled Rift Valley Railways.

The company started as an investment club in 1997 and went on to list 267 million shares valued at Sh50 each at the Nairobi bourse by way of introduction.

The power division – East African Cables, Kewberg, Tanelec and Câbleries du Congo – is the jewel of TransCentury, contributing two-thirds of total revenue.

The remainder comes from the engineering division – Civicon and Avery East Africa – as well infrastructure projects.

TransCentury is now banking on the experience and deep-rooted networks of Mr Waweru and Mr Awori to turn around its fortunes after posting a loss of Sh676 million in the half-year to June 2015.

Turnover rose by a paltry five per cent to Sh5.2 billion from Sh4.9 billion in the period under review, following a 25 per cent drop in earnings from its power division.

The revamped board will also be crafting strategies to defend the market share of East African Cables ahead of the entry of a Sri Lankan company into the cable market.

Sierra Cables, a company listed on the Colombo Stock Exchange, has announced plans to set up a cable manufacturing plant in Nairobi.