Former police spokesperson Eric Kiraithe quietly arrived at the official residence of the Communications Authority of Kenya (CA) the previous week on Friday.
The home, tucked away on a one-and-a-half acre plot near Valley Arcade, in Nairobi’s Lavington area, is the last battleground between Francis Wangusi, the former CA Director-General and his parent ministry.
Accompanied by at least a dozen police officers, Mr Kiraithe’s mission was to evict Mr Wangusi, who has been a thorn in the flesh for Information Cabinet Secretary Joe Mucheru.
On a good day, the eviction squad could have found Wangusi seated below a shade, at the back of the house overlooking the garden, sipping on any of his favourite drinks, as he watched free-range chicken and other birds roam the expansive compound.
But Mr Kiraithe, who was early this year appointed the ICT Principal Administrative Secretary, soon realised he had picked a bad day to kick Mr Wangusi out of the spacious residence.
He found locked doors and his men had to squeeze through the fence to access the premise to pin a notice on the house asking Wangusi one more time to pack and leave. Mr Wangusi was sick and recovering at Nairobi Hospital on the day his tormentors came calling.
He had defied the first vacation notice dated August 19, which had given him up to September 22 to quit. And to make true their threat, the board withdrew the security services extended to Mr Wangusi among them guards from Lavington Security Limited and deactivated the alarm backup response to the premises.
Just why Mr Wangusi would not leave and spare himself the embarrassment of having to be kicked out by police, no one knows. He told this writer he just needed a little more time to leave and he had been sick, so any employer who is not so cruel would not throw out a man who has just been released from hospital.
But more importantly, he said, the human resources manual allowed a retired member of staff three months to terminate the tenancy agreement of any house occupied, but CA out of malice had given him a 30-day notice.
“They (CA board) want to embarrass me and treat me unfairly. They wrote to me to vacate within 30 days despite the authority’s human resource manual clearly stipulating that a member of staff deemed to have retired from service shall be given a period of three months to terminate tenancy of any house,” Mr Wangusi says in his written response.
He was also putting finishing touches to his house in Karen and would be out of the residence long before the CA completed the recruitment of the next person to occupy the place. Then there was no one to hand over to, so why the hurry?
Mr Wangusi, 61, loves his drink and fiercely speaks his mind freely. He was first appointed CA boss on August 21, 2012. Had he been home that day, his goose could have been cooked.
But as soon as he got wind of the eviction party at his official residence, Mr Wangusi activated his agile lawyers, who immediately rushed to court seeking orders to stop the eviction.
A cat of nine lives, Mr Wangusi has survived several attempts to kick him out of the cash-rich communications regulator. The fiercest came in February last year when he fell out with his boss, the ICT secretary, over the handling of a case between Airtel, which the agency lost.
He would also refuse to give the ministry money to run its activities from his surplus. He also pulled a shocker when he refused President Kenyatta Sh1 billion from the USF to help police fight cybercrime. He would defy the order on grounds that he had no such money to offer. All this defiance made him a marked man. Mr Wangusi would, one morning, wake up to find he had been sent on forced leave.
He fought his way back through the corridors of justice and forced the CA to resort to an out-of-court settlement in a deal that allowed him to serve the remaining bit of his term.
How he would imagine that he would stay one more day at the agency after the end of his term is as puzzling as the request itself.
Mr Wangusi also made his name when he pushed through the digital migration and stood his ground against the media, causing great losses to local companies.
Now even at his retirement, he is not getting out of the agency he has worked for the past two decades without a fight.
At stake is at least Sh23 billion sitting in various accounts of the communications regulator at a time when the government is broke.
About Sh9 billion is in the Universal Service Fund (USF) — a kitty set up to fund mobile network expansion to far-flung rural areas that do not make business sense for telcos.
The fund is administered by CA and has been a target by national government of diversion of funds. The remaining Sh14 billion is held in other conventional accounts of the agency and getting more than Sh20 million requires the signature of the director-general.
Mr Wangusi’s official last day at the communications agency was on August 21, 2019 after a second and final term of four years as DG.
But four months later, the space scientist is yet to officially hand over his office following a series of board blunders and missteps at the agency that have characterised CA over the last few years.
Either by design or coincidence, Mr Wangusi has been the biggest beneficiary of the blunders that have seen him remain in office. He maintains that he vacated office. In fact, he swears that he retired peacefully, but as a law-abiding citizen, his handover must be above board.
Smart Company now goes behind the scenes of boardroom wars that have stalked CA in the last three months and the dramatic exit of Mr Wangusi, in another season of board composition standoff.
Several days before his term officially came to an end, Mr Wangusi wrote to the CA board chairman Ben Gituku seeking guidance on the way forward. He said in the letter that he was in a dilemma given that on one end, his final term was coming to an end, but on the other, he had orders from the labour court, which according to his interpretation, allowed him to stay put until the authority puts in place a substantive board.
Without a properly constituted board, any appointments by the CA board, according to Mr Wangusi, would have been illegal.
Though the orders were separately sought by the Consumers Federation of Kenya (Cofek) and activist Okiya Omtatah, the CA believed that Mr Wangusi was behind the suit, claims he denies.
It’s easy to see why the board felt Mr Wangusi had sponsored the court action. In the Omtatah petition, the activist asked for the court to allow Mr Wangusi to file an affidavit to show his willingness to continue in office and the basis of such willingness.
Besides, the CA board had its own interpretation of the same court order, and for them, the labour court had only stopped them from appointing a new DG and the status quo order did not mean he would be staying.
“The court ordered and gave directions that the “status quo” relating to the recruitment of the director-general be extended,” the CA said in a statement to the media.
“The court specifically pronounced itself on the import and effect of the order of status quo, to mean that it was in relation to recruitment of the director-general and not the extension of the term of office of the former director-general,” the communications regulator said.
The agency said it was necessary to clarify what it termed as media misrepresentations of the August 27 court order. The CA said Mr Wangusi had served his term and it was time to exit.
Two days to the end of Mr Wangusi’s contract, Mr Gituku wrote back, making it clear that the board did not intend to keep him around one day longer, irrespective of the court ruling and the lack of legal quorum at the board.
“As you are aware, the four years employment contract commenced on 22/8/2015 and hence will end on 21/8/2019, this being your last employment date at CA,” Gituku said in the letter.
“You will also note that clause No. 6 of the appointment letter indicated that the contract shall not be renewable since you were serving a second term,” Mr Gituku added. He spelt out that Mr Wangusi will be paid a service gratuity and a retirement token in line with the HR policy manual.
But first, Mr Wangusi had to complete a clearance certificate and return it alongside any other assets that were in his care before the retirement date.
Most importantly, Mr Wangusi was required to surrender his signing mandate, which would allow the CA board to appoint the next DG.
Before this letter, Mr Wangusi in his signature abrasive leadership style had used the vacuum in the board to make an unprecedented decision.
He had technically appointed the officer who will act in his place after his exit. His preferred successor until CA appointed a substantive board was Mr Juma Kandie, the HR boss.
“I write to inform you that I have left Mr Juma Kandie, director — human capital and administration, to hold brief and take care of all matters that relate to the office of the director-general including procurement matters,” Mr Wangusi said in a letter to the CA board on August 21, his last day in office.
For the avoidance of doubt as to his intention, he wrote a similar memo to the rest of staff.
That is when all hell broke loose. There is no precedent for such an action, at least not among Kenyan parastatals where once the term of the chief executive nears an end, the practice is to pack and go for terminal leave, three months before due date, to give the board a chance to recruit a suitable replacement.
Mr Wangusi’s action also served as another move to embarrass the ICT ministry, which was already smarting from an unfavourable court decision.
It did not also go down well with the CA board as events that would follow revealed.
The following day, what was left of the authority’s board met quickly and picked Mrs Mercy Wanjau, a commercial lawyer and the legal director at CA to the corner office.
At the meeting were Mr Gituku, ICT Principal Secretary Jerome Ochieng, Festus King’ori, an alternate director to the National Treasury PS and Mr Peter Wanjohi, the alternate director representing the Interior PS and the CA director consumer and Public Affairs, Mr Christopher Wambua.
It is this composition of the board that misses independent directors, that has been making decisions at CA that have been easily overturned by the courts as it is a one-sided board.
Only the chairman can be said to be an independent director. To be properly constituted, the board should have seven members, three of whom should be government representatives from the National Treasury, ICT, and Interior ministries. The rest should be independent directors with the DG as an ex-officio member. Now the board only has government appointees.
Instituting a board and on time has always been uphill for the ICT ministry. The last three boards have not assumed office without a fight.
The ICT ministry was again this year cornered after activists accused Mucheru of hand picking and appointing members of the CA board, which was inconsistent with the provisions of the Constitution, which require an open, fair, competitive, merit-based and inclusive processes of recruiting and appointing individuals into public offices.
The processes should also be subjected to public participation, which includes advertising vacancies, publishing lists of all applicants and shortlisted candidates and announcing and holding interviews in the open.
It is on this grounds that the court found that the ministry had a case to answer and stopped it from proceeding with the constitution of the board, which in turn is mandated to jump-start the process of recruiting the CA boss.
Mr Wangusi was not done yet. He would, on September 5, two weeks into retirement, write another letter to the head of public service Joseph Kinyua, seeking his intervention on the effective transition at the CA.
In the letter, Mr Wangusi argues that he was never provided an opportunity to know who was taking over the duties of his office and, therefore, had no opportunity to either hand over or brief anyone on the strategic and critical issues relating to the office in line with good governance.
“There has been a misconception that I did not cooperate upon receiving instruction to exit office and that I have contested the decision in court. I wish to clarify that none of the fore mentioned positions are true,” Mr Wangusi wrote.
He added that the court order had muddied the water and made it harder to know what route to follow in the exit process without jeopardising the assets and role of the agency in meeting the Big 4 agenda.
Mr Kinyua did not respond. It was now too late for any meaningful intervention.
Another significant development happened early in the year.
The Ethics and Anti-Corruption Commission pounced on six managers at CA over procurement irregularities, an action that reduced the pool of experienced employees that would compete for Wangusi’s job when the right time came.
Ironically, the six were arrested for cancelling a Sh4.4 million tender to renovate a stand at the Agricultural Society of Kenya show ground, in favour of Sh1.9 million, an action that saved the agency Sh2.5 million.
Whichever way it goes, Mr Wangusi exits having ruffled more than a few feathers.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.