Kenya Airways, KQ has rented the air in the recent past for the bad reasons just barely moths after launching direct flights to the US and Kenyans are yet to see the other side of the unending wrangles at the renown flight which is slowly loosing it’s grip in the air.
Parliament is investigating the link between a bank associated with President Uhuru Kenyatta’s family and the takeover of JKIA management by loss-making Kenya Airways.
Members of the Public Investment Committee, citing conflict of interest, have summoned the Kenya Airports Authority board on Thursday to respond to their growing concerns.
Lawmakers are also demanding to know the identities of the other KQ shareholders, besides the State, amid jitters that the proposed takeover of JKIA will not be viable.
It has emerged that KAA board chairman Isaac Awuondo is also the Group Chief Executive officer of the Kenyatta-owned Commercial Bank of Africa.
CBA and NIC, which have since been merged, are said to have lent the troubled national flight Sh5 billion which they are yet to recover
When he appeared before the committee yesterday, KAA chief executive officer John Andersen confirmed the debts.
The airline owes CBA Group Sh3.1 billion, NIC Sh2.1 billion, Equity Bank Sh5.2 billion, National Bank Sh3.5 billion, Co-operative Bank (Sh3.3 billion, DTB Sh2.1 billion and KCB Group Sh2.1 billion.
Andersen was pressed hard by MPs to disclose the powerful forces behind the airport deal but declined, saying he did not have details.
“I cannot speculate on the reason behind the deal or the faces behind it. We were approached by Kenya Airways on this matter and also got a Cabinet memo seeking that we manage the process,” he said.
Lawmakers have maintained there is more than meets the eye as the KAA chairperson is the same person whose bank seeks to recover money from KQ. The takeover bid has sparked an outrage, with criticism of unidentified ‘powerful forces’ out to surrender the national airport to a private firm.
MPs said the deal, in which KQ tentatively would run JKIA for 30 years, is suspect and a case of connivance among influential forces to rip off taxpayers.
The legislators, citing a conspiracy, criticised the plan, saying the country is at risk of losing billions of shillings in revenue should KAA be allowed to proceed. Lawmakers are also concerned that Kenya Airways owes KAA Sh3.8 billion and is losing its hold of the East African market share.
Further, an audit by KPMG is said to have revealed gaps that it wants KAA to address before further engagement with Kenya Airways on the deal.MPs also asked the agency to be straightforward on how it settled on MMC Africa Law as the transaction adviser in the takeover bid. The firm was hired under a restricted tender.
Nandi Hills MP Alfred Keter, a friend of the committee, sought clarification of the ownership of the 28 airliners operated by Kenya Airways.
Of these, only three are owned by Kenya Airways, raising questions about who owns the others, said to be leased from private entities.
The airline currently controls 34 per cent of air traffic, down from the 50 per cent it held in 2011, yet it has brought KLM on board as a shareholder controlling 23 per cent.
“KQ is a loss-making entity, hence, cannot be entrusted with the management of a profit-making airport,” PIC chairman Abdulswamad Nassir said.
Legislators further questioned how Kenya Airways allegedly initiated the deal before the Cabinet memo on the venture was served to KAA.
The committee has written to the Investments Secretary, demanding to know who the real shareholders at KQ are, noting that the proposed JKIA takeover will not be viable.
The committee wants Treasury to furnish the information by the second week of April, saying there is a lot at stake.
Early this week, Nassir reiterated that the deal between the national carrier and the KAA raises more questions than answers. “As we said recently, we need to get to the bottom of this matter. There is something we are not being told and as a committee we will investigate,” he said.