Billions at the centre of CA boardroom fights, insiders say
SEE ALSO :CA: Safaricom not against mergerCA says close to Sh4 billion of the fund has since been disbursed in aiding connectivity projects in public schools and county offices across the country with local telcos including Safaricom, Telkom and Airtel granted tenders to build the infrastructure. At a public rally last year, President Uhuru Kenyatta said the CA should move Sh1 billion from the USF to the Kenya Police to fund cyber-security efforts by the Directorate of Criminal Investigations (DCI). Wangusi is said to have opposed the move despite pressure from the board, insisting that the mandate of the USF was clear. “We have not received an official request from the government so at the moment we are proceeding with the rollout as planned,” said Mr Wangusi at the time when asked by The Standard whether the authority will wire the funds to DCI. This was just weeks before Wangusi was sent on compulsory leave as the board conducted an audit on some of his employment decisions.
SEE ALSO :Standoff continues at CAWangusi, who spoke with the Standard on Sunday the day he was notified of his three-month suspension, blamed hidden forces that sought to get rid of him for his hardline stance. “I had convened a board meeting but to my surprise, I was told I have been sent on compulsory leave for an audit to be conducted on some of the employment decisions I have made,” explained Wangusi. “I do not think the reasons given are genuine and I believe it has something to do with my hardline stance on several crucial matters the Authority has handled in the recent past.” Blocking Sh1 billion to the DCI was not the only unpopular decision Wangusi had made. Barely a month to his suspension, the High Court had blocked a Sh2.3 billion demand in license fees that the CA had slapped on Kenya’s second-largest mobile operator Airtel Kenya. Airtel Kenya’s frequency spectrum license expired in February 2017 and the CA had issued the mobile operator with a Sh2.3 billion demand letter in order to grant the firm a new ten-year license. Airtel protested the fees, arguing that the 2014 acquisition of Essar Telecommunications’ YU Mobile extended the company’s operating license to 2024, a fact the regulator had corroborated in a letter granted during the acquisition. Treasury was, however, opposed to the waiver, demanding that CA collect the funds since the authority did not have the mandate to grant a license waiver of that magnitude. The case dragged on in court for three years and in that time, the board of the authority had been split in two, one-half seeking to collect the license fees and the other maintaining that Airtel Kenya was exempt. The final court ruling was made in December 2017 with the judgment in favour of Airtel Kenya. This is said to have irked the Government that was looking forward to a Sh2.3 billion revenue windfall and the heat turned up on the regulator’s leadership. This is not the first time that the CA is finding itself in a leadership crisis and a legal dilemma. In 2012, the High Court nullified the re-appointment of the then Director-General Charles Njoroge, leading to a legal dispute by Cofek and a leadership vacuum that ended with the appointment of Francis Wangusi on an acting capacity. The boardroom wrangles at the CA now raise concern as to the independence of the Communications Authority, only guaranteed in law but limited in practice. The CA makes 75 per cent of its revenues from license fees and these have been steadily rising as more firms and service providers roll out new products and services in tandem with changing global trends. In the 2009/2010 financial year, a total of 610 licenses were granted by the industry regulator across the various ICT market segments. In the 2015/2016 financial year, this number had shot to 2,232 and is set to become bigger in the coming years as the adoption of digital technologies gains momentum. The Government is currently pushing through a proposal to tax the usage of over the top digital platforms such as YouTube, Facebook and Netflix. It is unclear how such a tax will be levied.
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