Corporate News
Former Safaricom chief executive Michael Joseph. PHOTO | FILE
By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com
In Summary
Former Safaricom chief executive Michael Joseph has said his priority at the troubled national carrier Kenya Airways will be to implement recommendations of an audit report that has exposed massive corruption at the cash-strapped airline.
Mr Joseph, who Wednesday took over the hot seat of Kenya
Airways board chairman, will be expected to oversee the implementation
of a turn-around strategy to rescue the struggling carrier, which
reported a Sh26.2 billion loss for the financial year ended March 2016.
Kenya Airways is Thursday expected to announce
half-year results for the period ended September 2016. The carrier has
already said it expects to report a Sh7 billion reduction in after-tax
loss to Sh5 billion and a growth in passenger numbers.
Mr Joseph replaced Mr Dennis Awori. He will be
expected to see through the ongoing staff and process changes at the
carrier, including restructuring KQ’s heavy debt load.
Mr Joseph, who is credited with growing Safaricom
from a nondescript unit of a former State corporation to the region’s
most profitable company, also wants to improve the morale of staff who
have in recent days been up in arms.
The 70-year-old acknowledged that the airline has a
lot of ground to cover, but insisted that with the right interventions,
the publicly listed company can be rescued.
“The board is studying the Deloitte audit report in
order to make factual corrections and establish the truth. After that,
we shall take the appropriate action,” Mr Joseph said in an interview.
“Restoring KQ will not happen automatically. We
have to look at areas like on-time performance, our debt, pricing and
the destinations we fly to. KQ can be salvaged. It is a great airline
with a new fleet.”
Major shareholders of the airline, the Treasury and
KLM, have made the boardroom change keeping in line with a promise they
made to KQ employees that heads will roll at the listed firm before the
end of this month.
The Kenya Airline Pilots Association (Kalpa), which
has about 400 KQ pilots, had threatened to go on strike last week if Mr
Awori and the airline’s chief executive Mbuvi Ngunze do not resign.
They accused the duo of mismanaging the airline,
causing it to report successive losses including the Sh26.2 billion loss
that it reported for the financial year to March.
Transport secretary James Macharia, while
announcing Mr Awori’s resignation and his successor, also reiterated
that those found culpable of “theft and corruption” will be prosecuted
where “the evidence is strong enough.”
“Mr Awori has been replaced by Mr Joseph who has
extensive international experience and is best known as the founding CEO
of Safaricom,” Mr Macharia said in a statement.
It is during Mr Joseph’s tenure as Safaricom CEO that
the telco’s mobile phone-based money transfer service M-Pesa was
launched, putting Kenya on the global map of financial services
innovation.
He is currently in charge of mobile money at Vodafone,
Safaricom’s biggest shareholder, and also consults for the World Bank on
matters regarding financial inclusivity in developing countries.
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