Posted on 13th Jan 2018 21:05:09 in
With 18 months still to go on his contract and a busy calendar of events, the suspension of Communications Authority of Kenya Director General Francis Wangusi on Friday came as a surprise.
“I had convened a board meeting but to my surprise I was told I had been sent on compulsory leave for an audit to be conducted on some of the employment decisions I have made,” explained Mr Wangusi in an interview with Weekend Business.
Wangusi now says the move to send him on a three-month compulsory leave has nothing to do with his recruitment practices, but a ploy by ‘hidden powers’ to get rid of him.
“To be sincere I do not think the reasons given are genuine and I believe it has something to do with my hardline stance on several crucial matters the Authority has handled in the recent past,” he said.
CA sent out a statement explaining that Wangusi had been sent on compulsory leave to allow for an independent audit of the human resource function at the Authority.
Christopher Huka, who was the Board session chair during Friday’s meeting, said the audit will be carried out following a decision of the Board of Directors to examine the organisation structure, promotions and training.
At the meeting, the Board appointed Mr Christopher Kemei as Acting Director General. Kemei is currently the Director of Licensing, Compliance and Standards at the Authority. One of the key agenda during the Board meeting was to discuss the way forward for the Authority following the High Court’s ruling late last month quashing a Sh2.3 billion demand in licence fees that CA had made on Kenya’s second largest mobile operator Airtel.
The case dates back to 2014’s exit of Essar Telecommunication’s yuMobile from the Kenyan market. In the Sh8 billion deal, Airtel acquired 2.7 million yuMobile subscribers at a cost of Sh710 million with Safaricom taking up Essar’s assets including frequency spectrum, phone masts and a 10 per cent stake in the TEAMS undersea fibre cable.
RENEWAL FEE FROM AIRTEL
In the initial agreement, CA reportedly told Airtel that Airtel’s operating licence will be merged with that of the defunct YuMobile that expires in 2025. This meant that Airtel was exempt from paying the Sh2.3 billion licence renewal fee.
This, however, did not sit well with the National Treasury, which at the time was hard pressed to meet revenue targets that wrote to the CA asking the regulator to recoup the Sh2.3 billion licence renewal fee from Airtel.
In the letter to the Authority’s board, Treasury’s Principal Secretary Kamau Thuge had informed CA that the licence fee was government revenue and only the Cabinet Secretary for the National Treasury had the authority to grant a waiver.
The agreement had, however, already been signed and in its ruling the High Court sided with Airtel stating the Authority was wrong in attempting to back-pedal on its contractual obligation.
“The Treasury has no power to direct the respondent (CA) on how to carry out its mandate,” said Judge George Odunga who gave the ruling. “By permitting the Treasury to do so, I find that the respondent did abdicate its duty.”
“The respondents decision to demand the applicant pays $20 million…though attractive in terms of enhanced public revenue and perhaps for the zeal of meeting annual tax targets, I find is not such an overriding interest for the reasons set out in this judgment,” said Judge Odunga.
Sources privy to the case, say last month’s decision by the High Court to quash the licence demand is said to have angered Treasury that was looking forward to the Sh2.3 billion windfall. This pain of foregone revenue was exacerbated by CA’s move last year to award Jamii Telecom Limited with the Sh2.5 billion 700MHz frequency spectrum without carrying out an auction as should be the procedure.
Jamii Telecom, which in late December launched its mobile and data network, denied receiving special treatment in obtaining the licence for Sh100,000 stating that it was for a trial service. Wangusi has cited this as one of the reasons he has been sent packing.
The surprise decision has left the regulator without a boss following the lapse of Chairman Ngene Gituku’s term in May last year and has thrown uncertainty over key operations at the regulator.
ICT Cabinet Secretary Joe Mucheru has, however, defended the board’s decision saying it is independent and free to carry out its functions. “The board took the decision and the members had their reasons for coming to that decision and I have not heard any notions that the board is under duress,” said Mr Mucheru.
“I do not think that this decision will have an impact on the Board’s activity because an acting Director General has already been put in place and the board has the mandate to continue their work.”