What you need to know:
Engineer Rosemary Oduor, who had been serving as the general manager for commercial services, took over as acting managing director.
Auditor-General has revealed that the exit pay package for Mr Ngugi also contravened the company’s staff regulations.
Auditor-General Nancy Gathungu has questioned the legality of a Sh26.82 million exit pay made by Kenya Power to its former managing director Bernard Ngugi who abruptly resigned from the utility in August 2021.
She said the send-off package was paid out without the approval from the State Corporation Advisory Committee (SCAC) as required in law.
“The payment was subject to approval by the Ministry of Energy and the National Treasury who both granted approvals on May 25, 2022 and April 11, 2022,” said Ms Gathungu.
“While not objecting to the payment, the National Treasury advised that the same be subjected to approval of SCAC. However, SCAC approval was not obtained prior to payment of the gratuity of Sh26.82 million as advised,” she said.
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Mr Ngugi exited the firm 15 months before the end of his contract. Engineer Rosemary Oduor, who had been serving as the general manager for commercial services, took over as acting managing director.
But Ms Gathungu has revealed that the exit pay package for Mr Ngugi also contravened the company’s staff regulations and procedures which provide that if an employee resigns before the completion of their contract, they would have no entitlement to gratuity or any terminal leave pay. The Auditor-General said Sh2.52 million of the exit payment was paid in lieu of notice yet in this case Mr Ngugi had resigned without giving notice and, therefore, ought to have paid the company a notice of Sh2.28 million.
“However, the payment was irregular since it is only payable to an employee whose employment contract is terminated by the company without giving notice. In the circumstances, the regularity of Sh26.82 million exit pay could not be confirmed,” she said. The Auditor-General’s revelations confirm that Mr Ngugi’s exit was hasty and he may have been a victim of a strong push by the State for a fresh broom at the utility.
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After less than ten months in office, Ms Oduor was also replaced by Geoffrey Muli, who in May last year was appointed as acting Managing Director.
Kenya Power in May this year appointed Dr Joseph Siror as the substantive managing director, nearly two years after the exit of Mr Ngugi.
Dr Siror had been serving as the general manager in charge of technical services at the Kenya Electricity Transmission Company (Ketraco) before he took up the corner office at Kenya Power.
Kenya Power named Mr Ngugi, a former head of its procurement division as chief executive officer in October 2019 in changes that sought to have the power monopoly improve its financial position amid a streak of losses.