Kenya: Implement audit report on Kenya Airways woes

KQ would be dead and buried if it were not for billions of taxpayer shillings pumped into the struggling flag carrier. file photo | nmg 

By EDITORIAL

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The national carrier Kenya Airways on Wednesday returned to the stock market with a bang after a two-week suspension from trading, but this must not be construed to mean that the airline is out of the red.

The nearly Sh59 billion rise in market valuation of the company over two trading days must also not be seen to imply that the carrier has suddenly regained its fundamentals.

To the contrary, serious soul searching on what pushed Kenya Airways (KQ) to the brink must continue, now that the rescue deal is done.

A forensic audit report prepared by Deloitte must be dusted off the shelves and implemented to the furthest extent necessary.

Most important, all people adversely mentioned in the report must be held to account.

Sweeping under the carpet matters raised in the audit reports will just amount to kicking the can down the road, and blindly hurtling to the next financial crisis.

It will also amount to a big insult to Kenyan taxpayers.

KQ would be dead and buried if it were not for billions of taxpayer shillings pumped into the struggling flag carrier.

While sentimental and economic considerations justified the taxpayers’ huge bailout, it will require more than just emotions to keep the airline afloat.

READ: Ex-finance chief reveals origins of KQ’s decline

New chief executive Sebastian Mikosz, who has showed a lot of pragmatism in his first few months on the job, must be given a free hand to pull the airline out of its financial doldrums.

Law enforcement agencies must, however, simultaneously bring to justice those who unjustly profited from the public entity.

KQ’s costly rescue already sets a terrible precedent whose impact is likely to be manifest in many other State-owned corporations for years to come.

Just Thursday, sugar miller Mumias announced more than Sh6 billion loss, despite receiving nearly a similar amount in Treasury bailout cash in recent years. The miller’s sharp drop in turnover, from Sh6 billion to Sh2 billion, paints the picture of a dying company.

Yet the Treasury is still contemplating pumping in more money into the struggling giant.

It remains a big shame that not a single person is in jail for plunder of public funds in Mumias or at KQ.