Friday, October 30, 2009

Youthful Tantrum

The saga at the Youth Fund continues at the board hit back at the Minister of Youth Affairs for ‘re-appointing’ the ‘previous CEO’ to his previous post. And the nightly news have duly shown two CEO’s show up at the Fund office, each claiming authority to run the Fund – one backed by the Board of Directors, one sacked by the Board (and reappointed by the Minister)
For month now the CEO has had the upper hand in the media making rounds that he had single handedly stopped the Fund from engaging in financing deal with Canadian group Enablis – one which would the Fund would have been better served by channeling these funds through local commercial banks

Now the board has hit back with a hard hitting statement giving reasons why they had fired the CEO including that he was in-subordinate, misused resources (over-claimed imprest, attend training for fun), took trips to his distant home in northern Kenya under the guise of making official trips in his government allocated car), inflated procurement contracts, among other things.

The government inspector appears to agree with the board in most of the allegations against the CEO; but their recommendation is also curious: they don’t say the CEO should be sacked, instead - “…the audit team noted the board had lost faith and trust in the CEO and that they cannot continue to work together as a team. The only prudent action by the minister is to separate the two.”

This bring to mind a similar stand-off a few years ago at Consolidated Bank of Kenya where the Board said the would not renew the contract of the CEO and asked the Minister to appoint a new CEO. However the cards were flipped on the Board and they were all sacked, while the CEO was re-appointed to a new contract

This time around the stakes are different. The board appears stronger and the Minister not as powerful; in fact she is under siege from her own assistant ministers and the Board who used comments against her this week in the media including ‘lying, crying, comical’. So how will this one end? How should it end?


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Anonymous said...

Board of Directors have now realised that they have the power to sack these political appointees. This is after the Ringera spectacle and they know that Parliament is behind them to prove a point to the Executive. Now when Sambili's Asst. Ministers are also against her, you know things are elephant.

She's not only out-numbered, but also out-smarted.

PKW said...

I should end this way: the CEO resigns to 'spend quality time with family'.
But this is Kenya, let's see how it will actually end. My guess is that there will be another story and everyone will be distracted, then the CEO will stay on board

Anonymous said...

Over-claimed on his imprest by Sh4,000... was rude to board... these people are joking. I tend to believe Wario was right to kill the crooked Enablis deal (to match lending on a 1:1 ratio when akina equity are matching 1:7). Trouble is, he has a weak defender on his side and the Inspectorate of State Corporations (PM's office) did this hatchet job to embarass Sambili and pave way for her ouster... Who benefits? Musa Sirma.

Mashatall said...

Board's in public/private companies are there to shepherd an organization and ensure good corporate governance, whereas state owned enterprises CEO's always act as a fiefdom unto themselves and owe their allegiance to the minister who appointed them. We need to change the status quo starting with Ringera and make the CEO's accountable to the board, checks and balances have to be effected if our parastatals are to be run professionally. As for the Enablis deal they offered a 1:1 matching deal for a reason, you have to look at the economiuc trends before you lend aggressively, look at where Equity's NPL's are as compared to a prudent Stanchart?


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