12 April 2014

Kenya: Controversy Stalks Nock CEO's New Term

Renewal of Sumayya Hassan-Athmani's contract to serve as the CEO of state-owned National Oil Corporation for another three years has sparked off controversy with a consumers lobby group.

The Consumers Federation of Kenya has sharply objected to the extension of her contract which expired on April 1, terming it "unprocedural". Cofek wants Cabinet secretary for Energy Davis Chirchir to rescind the reported fresh appointment.

Chirchir was quoted in one of the dailies as having acted based on Nock board's recommendation, but is yet to declare formally through a gazette notice.

Citing the "board's minutes" in its possession, Cofek said on Friday there was no board resolution to the effect and that the board was "highly divided" over Nock's corporate governance.

Secretary general Stephen Mutoro said the board did not hold a scheduled meeting to discuss the CEO's appraisal nor did Athmani formally request that her term be renewed.

A government circular of November 23, 2010 by former head of public service Francis Muthaura to ministry chiefs requires that CEOs of state corporations declare their interest for reappointment six months to the expiry of their terms.

Cofek is pointing fingers at Nock chairman Peter Munga for "circumventing the letter and spirit of the law" in recommending the renewal of the three-year contract without a majority board approval.

"Munga is very influential but it's unfair to circumvent the law because a number of directors have descended at his leadership and even Chirchir knows it," Mutoro told the Star on phone.

He said the oil marketer's leadership had failed in its primary role of stabilising fuel prices and instituting a sound corporate governance framework "despite being funded by taxpayers".

"In our assessment, we give the CEO about 50 per cent score because she has tried despite corporate governance challenges, but (she) does meet the 70 per cent cut-off mark," Mutoro said.

Cofek, he said, will launch a "vicious legal battle" if the said reappointment is not overturned within two weeks. In August 2011, the lobby successfully challenged in court the renewal of the then Communications Commission of Kenya director general Charles Njoroge's term after he scored 60 per cent, below the government's 70 per cent benchmark. The then Information minister Samuel Poghisio had ignored the CCK's board recommendation to terminate Njoroge's contract.

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