Standoff as KQ denies ex-finance boss entry

Former KQ finance director Alex Mbugua. FILE PHOTO | DIANA NGILA | NMG
Former KQ finance director Alex Mbugua. FILE PHOTO | SALATON NJAU | NMG 

Kenya Airways’ #ticker:KQ headquarters in Embakasi, Nairobi was yesterday morning the scene of rare high drama after the airline’s former finance director, Alex Mbugua, was blocked from resuming office in line with a court order issued Tuesday.

Mr Mbugua reported to work at 8.30 a.m. as ordered by Employment and Labour Relations Judge Monica Mbaru, but was stopped from accessing KQ’s Pride Centre offices.

Security officials handed him a letter instructing him to proceed on compulsory leave.

“Upon arriving at Pride Centre, I was blocked from driving into the employees’ parking lot or walking to my office. I was instead instructed to wait at the security bay,” Mr Mbugua told the Business Daily in an interview.

“The airline’s security manager then handed me a letter instructing me to immediately proceed on forced leave for 21 days.”

KQ did not respond to the the Business Daily’s queries on the matter.

Time to deliberate

The national carrier says it requires time to deliberate on its next course of action following the court judgment that found Mr Mbugua’s dismissal to have been unlawful.

The airline was given two options by the court — to either reinstate Mr Mbugua and compensate him for lost income or to negotiate a severance settlement equivalent to a four-year payout.

The payment, based on his last monthly salary of about Sh3 million, could amount to more than Sh144 million. 

Mr Mbugua has been fighting his sacking for the past 22 months, claiming that he was let go as part of a vindictive scheme by current and former top managers to conceal looting at the Nairobi Securities Exchange-listed airline.

It is understood that chief executive Sebastian Mikosz, who Justice Mbaru ordered to receive Mr Mbugua and allocate him duties, and chairman Michael Joseph are currently abroad.

Mr Mbugua served as KQ’s chief finance officer for eight years to January 19, 2016, mostly during the tenure of former CEOs Titus Naikuni and, for a one-and-half years, under Mbuvi Ngunze.

Following his termination, on claims of poor performance, Mr Mbugua proceeded to court seeking to be reinstated.

The Labour court on Tuesday ruled that Mr Mbugua had been placed at a disadvantage by his employer when he was requested to defend his performance yet he had also been told that he was going to be sacked.

Unreasonable, insufficient claims

The judge also found that though the arguments raised by the national carrier to justify Mr Mbugua’s sacking were reasonable, they were insufficient to warrant the termination.

Based on this and other considerations, the court ordered that Mr Mbugua be reinstated to his position effective Wednesday morning.

“The claimant (Mr Mbugua) is hereby reinstated... to his position without loss of benefits and any lawful entitlement to be paid within 30 days,” Lady Justice Mbaru ordered.

“In the alternative, the respondent shall pay the claimant salaries due for three years. Compensation amounting to 12 months’ salary at the last gross salary due on January 19, 2016.”

“I was taken aback by the move to send me on leave. My understanding is that this directive is contrary to the court’s orders. However, my lawyers are reviewing it,” said Mr Mbugua yesterday.

Mixed bag

KQ’s profitability when Mr Mbugua was in charge of the critical finance docket reflects a mixed bag of fortunes.

His first full financial year in charge (the year to March 2009) saw the airline move from a Sh3.9 billion net profit position to a Sh4.08 billion loss.

In the year to March 2010, the listed carrier moved back to profitability, posting Sh2.03 billion in after-tax earnings.

Profitability improved 74.4 per cent in 2011 to Sh3.54 billion, but dipped to Sh1.66 billion a year later.

From March 2013 to date, KQ has remained in loss-making territory, prompting the ongoing restructuring that has seen several top managers exit the company.

Three months after Mr Mbugua was sacked, the airline reported a Sh26.2 billion net loss, a record in corporate Kenya.

Mr Mbugua, when filing his suit in April 2016, claimed he was handed the pink slip for, among other things, raising the alarm on irregular ticketing practices in some stations like London and recommending a review of KQ’s relationship with KLM.

He further argued that KQ’s massive losses should be blamed on Mr Ngunze and former commercial director Gerard Clarke, saying they failed in their duties of ensuring the airline hit its revenue targets.