A row has erupted at the Kenya Post Office Savings Bank following the cancelled recruitment of a new managing director.
Documents in the possession of the Star show that the board of directors and management are split on the recruitment process.
It is alleged the bank’s current MD Anne Karanja called off the recruitment, a matter that informs a case filed by activist Okiya Omtatah at the Labour court.
Karanja’s term is set to end on February 29, with her continued stay above the retirement age of 60 escalating the conflict.
Eyes are on the board on whether it would resolve the debacle in its meeting scheduled for Monday morning.
Filling the position has been a thorn in the flesh, a situation that was aggravated by the long period the entity survived without a substantive chairman.
Members of the board, at its meetings, kept assigning Moses Banda – a director, to act.
He was among the directors who recommended to the suspended Treasury Cabinet Secretary Henry Rotich not to renew Karanja’s contract.
Correspondence between the board and Rotich cites incompetence, poor financial performance, poor management of staff contracts, unilateral trading of bonds, poor collection of debts, and poor cost management.
“…whose term from the period that she was appointed to act as managing director is characterized by huge losses,” board members Mercy Luseno, Samuel Bunei, and Banda said in the June 10, 2019, note to Rotich.
On June 25, 2019, the board again wrote to Rotich on declining the outgoing MD’s request for annual leave because her contract was expiring on August 31.
“The MD having attained and surpassed the retirement age, should hand over to Chief Operations Officer Sylvester Obuon in an acting capacity.”
The matter did not proceed after Rotich was removed from office and upon taking over, acting Treasury CS Ukur Yatani granted the MD an extension.
He would then in October appoint Ntoros Ole Senteu as the substantive board chairman and later revoked Banda’s appointment as a director on November 6, 2019.
Banda challenged the move in court and secured orders staying the revocation until his appeal is determined.
Before Ntoros’ appointment, the team led by Banda resolved that Karanja proceeds on terminal leave to pave way for her replacement.
In August, Yatani instructed the board to urgently commence the recruitment of a new managing director through a competitive process.
But the power intrigues in the bank’s corridors saw the process delay until November 5 when an advert calling for applications was placed in the local dailies.
The same was cancelled two days later under unclear circumstances, sparking protests by Chama cha Mawakili – a company involved in public interest issues.
The lawyers termed Karanja’s extension of time in office illegal, unlawful, and should, therefore, be declared null and void.
“The Postbank MD’s office must be occupied by an individual who has been recruited through a transparent, fair and competitive process that is cognizance of public participation and meets the integrity threshold,” Chama cha Mawakili said.
Following the arbitrary cancellation, Omtatah moved to court for orders to compel the managing director to vacate office and hand over.
He also asked the court to compel the board of directors to conclude the recruitment process.
On allegations that Karanja ordered the cancellation, Omtatah argues that the MD is conflicted “as an interested party and one who has no capacity to override the board.”
“There was no board resolution to cancel the recruitment and no reasons were given for cancelling the call for applications,” Omtata says.
“Clearly, some strong forces which are determined to keep her in that position past February 29 are giving her a big head.”
The board, CS Yatani, Attorney General Paul Kihara, and Karanja are the respondents in the case which has been certified urgent.
Procedurally, a managing director wishing to be reappointed is required to write to the board six months before the expiry of his/her contract.
The board then evaluates an MD’s performance and recommend continuity if suitable or advises them to take terminal leave to usher new recruitment.
A position of MD is only declared vacant if the board has no intention of renewing the incumbent’s contract, this being the case of Karanja.
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