Government demands restructuring of KQ ahead of bailout

September 1, 2015


Rotich said they were also consulting other shareholders to restructure the airline's board/FILE
Rotich said they were also consulting other shareholders to restructure the airline’s board/FILE
NAIROBI, Kenya, Sep 1 – Treasury Cabinet Secretary Henry Rotich says they have demanded major changes in the Kenya Airways’ management before they airline is given the Sh60 billion bailout monies it requires after posting a Sh25 billion loss.

Rotich said they were also consulting other shareholders to restructure the airline’s board.

“The board has made steps to deal with the management including filling some vacant positions and also dealing with areas of weaknesses. This is because the terms we agreed on lending the Sh4.2 billion including the support from Afrexim, we have demanded that Kenya Airways must do a.b.c first,” said Rotich.

He was responding to a question by Mandera Senator Billow Kerrow when he appeared before the Senate committee on Kenya Airways Inquiry who asked over what were terms of the government’s intervention.

“In other countries, the board should have resigned,” said Mutahi Kagwe (Nyeri)

Rotich said they were looking at how the management handled the shocks the airline experienced, and how they were able to adapt to them, and anyone who failed would be responsible.

The committee chairman Anyang’ Nyong’o (Kisumu) cited the chairperson of the board, the Chief Finance Officer and the Chief Operating Officer as those who should be answerable since they led the company into purchasing aircrafts at a time when it was not favourable.

“It did not make sense dream lining,” he said.

The Treasury CS however defended the move by the airline saying it needed the aircraft to compete in the regional market and face of off with its competitors.

The CS also stated the ministry’s intention to conduct a forensic audit of the company’s accounts after allegations were made that the accounts may have been ‘cooked’ over the years to please shareholders.

“We want to ensure the actions we do now ensure people earn dividends. We need to come up with a new a new turnaround strategy and see whether the existing shareholders will be part of it,” he added.

He added that their major concern was developing a proper turn-around strategy that would accommodate all the stakeholders and ensure the price of a share which is now at 6 shillings does not drop further.

“Equity injection will definitely be a requirement, but we will see how this is done as the government we are bridging to ensure the airline stays afloat,” he added.


Latest Articles

Live prices

Stock Market

Most Viewed