Why Ngugi Quit His Lucrative Job As Kenya Power CEO

Kenya Power CEO Bernard Ngugi has stepped down and has been replaced by the General Manager customer service Engineer Rosemary Oduor.

The electricity supplier, however, did not reveal the reasons for Mr Ngugis surprise exit but sources indicated boardroom wrangles forced his ouster.

According to sources, the new Vivienne Yeda-led board that was chosen in November last year took an active role in management, including querying procurement decisions and dropping management’s strategy to increase tariff rates that officials believed would lift Kenya Power out of the red.

“The board came with the mentality that Kenya Power is rotten and they have to clean the company. Their main focus has been on tenders where the board has been micromanaging,” said the source.

“There has been bad blood between the board and the management and little is moving. Two months ago, the board sat to remove Mr Ngugi but there was a split.”

Kenya Power has had four CEO’s in just four years a huge turnover at the troubled company’s most critical office.

In 2018, Mr Ken Tarus was hounded out of office and charged along his predecessor, Ben Chumo, and a number of other senior managers for conspiring to commit an economic crime and abuse of office.

He was replaced by Jared Othieno in acting capacity.

Mr Othieno served up to 2019 and was replaced by Mr Ngugi, who was at the time head of the utility’s procurement division.

Mr Ngugi’s tenure was marked by huge losses when Kenya Power sunk to a Kes 939 million net loss for the year ending June 2020 after getting a Kes 6.1 billion tax credit from lower corporate taxes given to companies to survive the vagaries of coronavirus pandemic.

The tax credit lifted the company from a pretax loss of Kes 7 billion.

The State corporation’s half-year profit as at December 2020 tumbled 80 per cent to Kes 138 million from Kes 692 million at similar stage in 2019 attributable to higher financing costs as a result of unrealized foreign exchange losses occasioned by the depreciation of the shilling against major foreign currencies.

The electricity supply monopoly business was not able to meet its debts on time with US energy firm Ormat Technologies stating the amount overdue from KPLC was Kes 5.3 billion ($48.9 million) out of which Kes 1.7 billion ($16.2 million) was paid in January and February this year.

The firm has also seen changes in the office of board chairman with Mahboub Maalim Mohamed replacing former House Speaker Kenneth Marende as the chairman and most recently Vivienne Yeda taking over.

Ms Yeda told shareholders CEO’s at the company had turned the utility firm into a “procurement machine” and promised to plug the loopholes.

Mr Ngugi, was in charge of procurement when the firm signed a contract with a private company for the supply of transformers, which turned out to be faulty.

The Employment and Labour Relations Court in November 2020 dismissed a petition to remove Mr Ngugi from office due to integrity issues relating to the procurement of transformers when he was the general manager for supply chain.

The petition was dismissed on the basis of a defective affidavit.

Mr Ngugi was one of the few senior managers who remained at the firm after a procurement scandal forced out 10 others, including his predecessor, Ken Tarus.

Mr Tarus, his predecessor, Ben Chumo and other senior managers were in July 2018 charged with abuse of office for allegedly entering into a contract with a private firm for the supply of transformers, which turned out to be faulty.

Prosecutors said the deal also flouted procurement rules for State entities. Mr Ngugi’s exit now deepens the management instability at the power monopoly that last year sank into the first loss in 17 years.