Dr Kamau Thugge, the Treasury PS (left) and Communications Authority of Kenya Director-General Francis Wangusi. PHOTO | FILE
By MARK OKUTTAH, mokuttah@ke.nationmedia.com
In Summary
- Ousted directors say their demand that the operator settles the fee is based on the fact that only Treasury CS has powers to vary government revenue.
- The ousted board members yesterday said that the Treasury backed their position and that it was Mr Wangusi who breached the rules when he chose to solely write to Airtel assuring them of a fee waiver without the board’s approval.
The battle for control of Kenya’s telecoms sector
regulator yesterday took a new turn after the agency’s embattled board
members made public correspondence showing that the Treasury supported
their position requiring Airtel to pay the Sh2.1 billion licence renewal
fee.
The revelation was made in response to claims by the
Communications Authority of Kenya (CA) chairman Ben Gituku and
director-general Francis Wangusi last week that the board’s insistence
on payment of the licence fee was driven by the quest for bribes.
The letter, which the board members circulated
alongside their response to Mr Gituku’s and Mr Wangusi’s bribery claims,
shows that Kamau Thugge, the Treasury principal secretary, had made the
Treasury’s position on the matter clear, arguing that Airtel never
obtained any frequency spectrum from the yuMobile buyout to warrant a
waiver.
Dr Thugge stated in a November 24, 2015 letter to
Mr Wangusi that only the Cabinet Secretary for Treasury had powers to
waive the fee.
“The National Treasury would wish to emphasise that
the licence fee paid by the mobile operator (for operations and
frequency licence) is revenue of the GoK... The Authority or any other
entity, other than the Cabinet Secretary for the National Treasury, has
no powers to waiver any Government Revenue,” Dr Thugge said.
The PS then proceeded to direct the CA to immediately begin pursuit of the fee from Airtel.
“The same should immediately, on receipt, be paid
to the exchequer and in any case not later than December 31, 2015,” the
PS said.
Dr Thugge argued that it was Kenya’s top mobile
operator Safaricom that acquired network infrastructure, including
associated frequency spectrum licences, during the joint buyout of
yuMobile assets in Kenya.
Airtel acquired the operating licence and
subscribers, meaning the country’s second-largest operator could not
claim to synchronise a licence to frequencies they do not own.
“Airtel therefore did not acquire the frequency
spectrum licence from ETKL and has obligation to pay for the renewal of
their spectrum licence,” the Treasury said, a position that contradicts
Mr Gituku’s and Mr Wangusi’s claim that the Treasury had not taken a
position on the matter.
The ousted board members yesterday said in a press
statement that the Treasury backed their position and that it was Mr
Wangusi who breached the rules when he chose to solely write to Airtel
assuring them of a fee waiver without the board’s approval.
The ousted directors also said they did not
overturn any decision by the previous board as alleged by Mr Wangusi and
Mr Gituku during last week’s press briefing.
They said their refusal to ratify the management’s
action was done with the knowledge and understanding “that neither the
CA nor the board has powers or authority to waive or vary tax, fees or
changes due to the exchequer,” and that Mr Wangusi had acted on his own
and without a board resolution purporting to exempt Airtel from paying
the Sh2.1 billion fee.
The embattled directors dismissed the bribery
claims, insisting that their decision was also based on the
recommendations of a staff management committee it had set up to study
the matter and advise it.
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