WHY EACC WILL NOT PROBE KENYA AIRWAYS FOR SHS.26 BILLION LOSS

Integrity Centre in this picture taken on June 17, 2015. EACC Deputy Director Michael Mubea has said the Commission cannot voluntarily investigate Kenya Airways over Sh26 billion loss as it is a private entity. FILE PHOTO | BILLY MUTAI | NATION MEDIA GROUP 

By ISAAC ONGIRI

The anti-corruption commission has said it may not "voluntarily" investigate the Sh 25.7 billion loss reported by Kenya Airways.

Ethics and Anti-Corruption Commission (EACC) Deputy Secretary Mr Michael Mubea said the ownership of shares in the airline makes it a private entity.

“We may want to look at it but our hands are tied. The private ownership is so huge making it look like a private entity,” said Mr Mubea on Monday.

Leaders have called for investigations into the airline's current and past management to unearth the cause of the historic loss that is threatening the survival of the airline.

The Nation however established that the government, through the National Treasury, owns 29.8 per cent shares and declined full takeover in 2012 leaving the ownership in the hands of private shareholders.

“The government having applied for its full entitlement of new shares, and thus resulting in its shareholding in KQ reaching 29.8 per cent, has applied for an exemption from the take overs and mergers regulations,” KQ said in statement in June 2012.

Dutch Airline KLM from the Netherlands is also listed among top shareholders with 26 per cent.

Despite its majority private ownership, the National Treasury is already rolling out a bailout plan with experts saying that Sh 60 billion would be required to get KQ back to profit making.

The National Treasury Cabinet Secretary Henry Rotich said the ministry will first investigate the loss before it can move on with any bailout plan.

Kisumu Senator Prof Anyang' Nyong’o on Monday blamed the airline’s stringent market policies for the loss.

He said poor investments decisions by management of buying and leasing aircrafts, fuel hedging under arrangements which are not profitable to the company contributed to the loss.

“Kenyans are aware that the Senate established a Select Committee to look into the crisis facing Kenya Airways, the national flag career, after I moved a motion to that effect over two months ago.

"The Committee has held several meetings, including two public hearings, but the work is not yet completed,” the Senator said.

KQ's highly priced tickets, he said, only made matters worse as it forces potential customers to turn to alternative airlines.

“Routing arrangements and partnerships which may account for massive losses of revenue, particularly due to lack of expansion of KQ flights in the African routes also led to the massive losses,” he said.

CREDIT: NMG