Automobile Association of Kenya (AAK) is accused of firing over 100 employees at gun point.
Staff narrate that a new management that is in place brought police officers to their premise, forced some to sign new working terms and worse still termination letters.
“This involves one of the managers you had indicated in the HFC scandal (Frank Theuri), he was later appointed as a CEO at AAK & has terminated all long serving staff under armed police guard & is now in the process of converting the AA to a private company and sell shares unprocedurally”, the source wrote.
The source added, “The new management has ushered the era of poor governance at the firm as police were used to force us’, said a source.
AAK was established in 1919 and has survived for over 100 years. The firm blamed the sackings on the slowdown Covid-19 pandemic.
“The Covid-19 pandemic has caused operational and financial challenges to businesses in the world and AA Kenya is not an exception’, the CEO Frank Ireri wrote in part in a letter addressed to staff as he threatened staff with unpaid leave and 50 per cent salary cuts.
Some of the complaints by staff are outlined below:
- The AA Management slashed staff salary by 50% in March 2020 which was very opportunistic as the Covid-19 pandemic effects had not even started to be felt.
- As if the salary cut was not enough, the AA Management then cancelled the staff medical cover immediately leaving them exposed without their normal salary and nothing to cater for their medical expenses. Why not terminate for the Board members who are covered higher premiums plus their families yet they can afford their medical bills?
- The AA had also just announced excellent performance through a circular to staff and confirmed having made a surplus of Kshs 93 million. Where has this money been taken to yet the AA is a Club which does not issue dividends to members?
- The AA of Kenya has a revenue of approximately 65 million per month and therefore bearing in mind there are no dividends payout, the Management should be held accountable for ensuring they have reserves in case of an emergency or negative impact on the economy.
- The AA highest income is obtained from Driving School which is approximately Kshs 35 – 30 m per month this money is TAX FREE so they should not gauge themselves against other Organizations which are paying Tax to the Government.
- It does not make sense that the AA Management if it is genuinely broke moved out of their Headquarters in Embakasi which they own the property and built at a cost of Kshs 97 million in year 2000 therefore rent-free to Upperhill which cost millions of shillings to refurbish (approximately Kshs 21 m) and monthly rental of Kshs 500,000. This is outright mismanagement and waste of resources and unfair that staff have to pay the price for poor decision making.
- The AA Management is always organizing Board Members retreats, Senior Staff retreats in expensive hotels out of town and Golf sponsorships; this kind of spending is not expected from a Company which claims to be broke.
- The CEO is also notorious for frequent travels abroad which earn him thousands of shillings in per diems which again indicates lack of prudent spending of the AA resources if indeed they are broke. In addition, he recently acquired a Toyota V8 at Kshs 7 million for himself in a supposedly broke Company?
- The AA Management has been lacking staff welfare empathy and this is clear due to recent staff turnover, staff transfers meant to frustrate them and finally staff retrenchment that did not achieve wage bill reduction as more staff were employed to replace those who left at much higher salaries.
- The CEO (Francis Theuri) had previously worked at HFC Bank and is among the staff who were cited in some media platforms as part of running down the Organization.
- The Government needs to intervene urgently in line with its Agenda 4 on creation of employment to save Citizens from unnecessary job losses that could have otherwise been avoided due to eventual collapse of these Organizations as a result of mismanagement.
