How boardroom wars at KPC have created perfect ground for looting

Kenya Pipeline Company Secretary Gloria Khafafa when she appeared before the National Assembly Public Investment Committee in June. [File, Standard]

As pretty as she is smart, little known Gloria Khafafa, who rose to be a company secretary at Kenya’s largest mover of fuel products knew how to get the right people in her corner at Kenya Pipeline.

Ms Khafafa was a traveller who loved to share her photos in different cities on her social media pages, but she deleted them mid last year when questions were raised about how she got her position.

Despite the company’s human resource department recommending her suspension over her qualifications on numerous occasions, she managed to serve at the position until the Directorate of Criminal Investigation’s (DCI) nabbed her yesterday.

So powerful was Ms Khafafa that a meeting meant to discuss her suitability for the post was called off at the last minute when the disciplinary committee had already assembled at Kenpipe Plaza.

“Please note that the staff disciplinary committee has been called off on the managing director’s advice and you are therefore required to return the confidential memo inviting you to the meeting undersigned,” read a letter by Rose Nginja on July 10, 2014.

Two months later, in September, Ms Khafafa, who HR had recommended for suspension for lying about her CPS (K) qualification and being a Certified Public Secretary, was part of a board meeting that was supposed to discuss her conduct.

In fact, she was the one taking the minutes. Then the board confirmed her.

“Members discussed the issue at length and resolved to confirm the appointment of Gloria Khafafa to the position of Chief Legal Officer,” minutes of that meeting held on September 15, 2015 read.

Such are the power games being played at KPC and which have for a long time helped in shielding those suspected of wrong doing, creating a perfect ground for looting.

So fractured is the board which is split down the middle with both sides representing different political and economic interests that Chairman John Ngumi and CEO Joe Sang rarely agreed on anything.

Mr Sang, who was appointed by Charles Keter in April 2016 before the Energy Ministry was split, is thought to be an ally of Deputy President William Ruto. He took over from Flora Okoth who was acting MD since July 2015 after the suspension of Charles Tonui who was charged with irregularly awarding a Sh29 million contract for the installation of auto transformers.

The most recent of such high octane games played out last week when some board members stayed away from a meeting that was supposed to discuss Sang’s conduct.

The crisis meeting called last week on Wednesday by Mr Ngumi was also supposed to discuss the loss of Sh1 billion worth of fuel. Only Ngumi, Petroleum PS Andrew Kamau and independent directors Winnie Mukami and Rita Okuthe showed up.

Turf wars

Hudson Andambi, Maj (Rtd) Iltasayon Neepe, Erick Korir, Jinaro Kibet, Wahome Gitonga and Felicity Biriri who are the other directors stayed away, denying the meeting the required quorum. Andambi, who has been an alternate director representing the Ministry of Petroleum and Mining at the board, was appointed yesterday to replace Sang.

“Following the unfolding events at the Kenya Pipeline Company and the arrest of top management, the ministry in consultation with the chairperson of the KPC board has appointed Hudson Andambi as interim manager KPC,” a statement by Kamau read.

“This is to ensure that operations continue without interference for purposes of ensuring security of supply of petroleum products.”

Two weeks ago, the turf wars played out in Parliament, forcing the National Assembly Energy Committee chaired by Nakuru Town East MP David Gikaria to conduct different sessions with Sang and Ngumi.

When his turn with the law makers came, Ngumi said the management was incompetent and inefficient. Sang however said everything was working well and there was nothing to worry about.

But like all the power games in the company, there has always been higher power involved in the quorum hitch. And it is not difficult to see why. KPC is an institution flush with cash, considering its near-monopoly in the transportation and storage of fuels.

It rakes in about Sh12 billion a year as net profit out of a revenue of about Sh24 billion. It is also one of the biggest spenders on infrastructure, which has turned it into a lucrative corruption cookie jar and a revolving door for managing directors.

Among the scandals the DCI is investigating at the company is a decision to award a lucrative tender to Zakhem International, a Lebanese firm, to build a new pipeline in 2014 at nearly Sh48 billion — yet the contract price has been adjusted upwards by at least Sh2.7 billion.

Frozen accounts

The line is yet to be complete and Zakhem’s accounts have been frozen.

The corporation is also under probe for the purchase of Hydrant Pit Valves (HPVs), the equipment used for refueling aircrafts.

It allegedly procured the equipment at Sh660 million yet their estimated value was Sh59 million. The payment was about 1,010 per cent over market value.