Sumayya in troubled waters as National Oil boardroom wars rage

The plot to kick out National Oil CEO Sumayya Hassan-Athmani from office was set in motion after a board meeting in Naivasha last year.

Ms Athmani had arrived at the meeting at the lavish Enashipai Resort & Spa clear about her mission.

She was armed with a presentation for the newly appointed board. Her key staff were adequately briefed and knew there was no room to make any mistakes. Not even alcohol was allowed; there could be no slip ups.

The location, Enashipai, with its acres of manicured lawns, elaborate waterfalls and plush conference facilities, was expected to set the right tone for the meeting.

Athmani, whose face has come to be associated with the National Oil Corporation of Kenya (Nock), wanted to achieve two main goals.

At the end of the two-day retreat, her new board would be dazzled by the work she has put in at the State-owned oil marketer, and buy into her strategy.

Discuss strategy

Athmani had convened the retreat just weeks after President Uhuru Kenyatta named Nock’s new board in April last year.

But the meeting did not end as planned for after it, the plot to kick her out of office was set in motion, a highly-placed source revealed.

The retreat was also expected to give the top management team from Nock an opportunity to interact and familiarise themselves with their new board and understand their expectations.

Athmani, who is described by staff at the oil marketer as stubborn, tough and extremely religious, had lined up her best people to discuss strategy and conduct an induction of sorts.

But not the entire board was new to the energy sector. The new chairman, Daniel Wamahiu, for instance, is no stranger to the industry.

Mr Wamahiu, who was also the TNA pointman in Nyeri and later hosted the Head of State after his inauguration, had previously served as the board chairman of the Kenya Pipeline Corporation (KPC).

Athmani was counting on the meeting at the lavish hotel to strike a good working relationship with her new board right from the start, and steer the organisation out of incessant boardroom wars.

Her previous board had fought her and she did not want a repeat performance.

A source, who attended the meeting, said after the managers finished their presentation, the board requested an exclusive meeting with the chief executive.

“It was almost a full house and we had quorum. I don’t remember if anyone significant was missing at this retreat,” the source said.

After the rest of the Nock team left the meeting, the board asked the CEO to open up a little and explain the marketer’s real challenges.

Athmani, now relaxed, freely discussed what the institution was going through, including conflicting demands from the Treasury and Ministry of Energy.

For instance, she told the board how tough it has been juggling pressure from the Energy ministry to lower prices on one end, and at the same time meet the demands of the Treasury in increasing funding.

The authority was also operating largely on debt from banks at the time to subsidise Government funding.

“She said this was making it difficult to compete with existing players, some of whom have access to direct funding from their parent companies,” the source said.

The meeting went on well until she began to talk about deals.

“She [Athmani] said she had had a lot of trouble with her previous board because of deals. She faced the board and said she doesn’t do deals and her background does not allow her to discuss deal-cutting or engage in doing business with the corporation,” the source said.

NOT BLAMELESS

This is when all hell broke loose. Some board members present at the meeting were shocked that she could so openly tell them to their face that she does not cut deals.

Athmani, who always has prayer beads with her, is, however, not blameless. She was the boss of the organisation when some procurement irregularities were committed.

The Standard last week broke the story of the deals worth Sh75 billion that are at the centre of the latest National Oil storm.

Some of these irregularities have already been picked up by the Ethics and Anti-Corruption Commission (EACC), which launched investigations this month.

“The Ethics and Anti-Corruption Commission is carrying out investigations on procurement irregularities at National Oil Corporation of Kenya ... please provide the procurement documents relating to the tender which was awarded to M/S Hyrax Company,” an EACC letter (pictured right) signed by John Lolkoloi, the deputy director of forensic investigations, reads in part.

In a telephone interview, the Nock boss said it would not be prudent to comment on boardroom matters at the institution, and stayed clear of the investigations by EACC on grounds that it would jeopardise the process.

EACC is digging into at least three contracts estimated to be worth hundreds of millions of shillings awarded by Nock under Athmani’s watch.

They are a lubricants contract awarded to Hyrax Company, a security solution installed at the corporation as well as an audit contract awarded to PricewaterhouseCoopers.

“The Auditor General was not involved as should have been the case in the audit contract. These contracts were irregularly awarded,” a source told Business Beat.

It is for this reason that the board, which reportedly had some members who had already singled out individual projects they were interested in, was shocked. They were caught off-guard by Athmani, who had her own skeletons to deal with, speaking so openly about cutting deals.

That was when the project to eject her was initiated. Her fate was sealed. It was just a matter of time.

Since then, she has not known peace. Her boardroom office turned into a battleground, and she ended up in the cold for 27 days after the board sent her on compulsory leave in January.

She has remained a woman under siege even after Deputy President William Ruto reinstated her from suspension until investigations are complete.

When she resumed office on the seventh floor of AON Minet House, off Nairobi’s Nyerere Road, she found the firm had made Sh104 million in losses in the time she was away.

The revelation is contained in a letter sent to the board and copied to the Ministry of Energy.

Business Beat has also learnt that the board formed a new committee to monitor and report on Athmani on an almost weekly basis, a move she reported has rattled her.

It was revealed that the board management committee has been meeting frequently, with a member drawing Sh100,000 in sitting allowances per session.

Members of the committee are drawn from both the board and management and they report weekly to the board on happenings at the corporation.

Deteriorating relationship

The protest letter Athmani wrote to the board reveals the deteriorating relationship between it and the current management.

“This committee met weekly during my absence. The role of the board is at the strategic and oversight level, not at the management level. I have severally (sic) raised this issue of the board blurring the lines between its role and the role of management, which is in breach of corporate governance principles and of Mwongozo,” she wrote to Mr Wamahiu.

The board chairman refused to comment on the letter on the grounds that he had not received it.

“I am not aware of the letter. I have not seen it and I cannot comment on it,” he said by telephone.

He, however, denied seeing the letter even before we told him what its contents were. Asked if the corporation had never written any letter to him in the past that would explain his quick denial, he hang up.