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"id": 117168,
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"content": "On 3rd November, 2009, the Board of New KCC, during its 19th Special Meeting at the Creameries House, deliberated among other matters, the renewal of the MDâs contract, which was due to expire on 30th November, 2009. The Boardâs decision was conveyed to me through a letter from the Chairman, dated 4th November, 2009. I took time to reflect on the matter comprehensively, taking into consideration the following factors:- (1) Co-operatives are being reformed and facilitated to play a key role in the achievement of Vision 2030. (2) The New KCC is facing mounting stiff competition from the private sector. (3) The Government has put in place a more professional Board in the last one year to address the above issues. (4) The relationship between the MD and most of the Board Members, and several senior staff members is not good. (5) Reports on mismanagement that I could not ignore reached me. These include misuse:- False mileage claims by the MD even when he was on leave; massive misuse of company vehicles; authorisation of payments for substandard contracts amounting to about Kshs30 million, in respect of Dandora Plant Fencing, which is still incomplete, construction of Plant Roof at Miritini, which was poorly done, and painting of the Head Office building, which was substandard; installation of an expensive vehicle management system, at a cost of Kshs5 million, that hardly works and which was also installed on tractors and forklifts unnecessarily; leasing out of a plot on the same title as the Headquarters Building for 12 years to a person who is now constructing a permanent double-storey building without the authority of the Board; and, engaging in impunity by refusing or delaying to implement the Boardâs decisions, leading to loss of money to the company. Mr. Speaker, Sir, in order to ensure that the budgeted profits of Kshs500 million are reached, and to appear to meet the performance targets, the MD put in place measures that held the company back from growing fast enough, resulting in the company continuing to operate at well below 50 per cent of its capacity. This is not an acceptable business model. The MD is said to have paid Kshs30 million dividends to the Treasury in order to appear good in the public eye when the company had more other critical things to do, including repayment of bank loans. Other allegations made against the MD, include failure to take action following very serious theft of milk and butter stocks, theft of Kshs16 million last May, and Kshs10 million a few months before then; even though there were claims of involvement of senior persons in these cases, no action is being taken to seal the loopholes despite my request that they employ a qualified stocks manager. The company was penalised a sum of Kshs20 million by the Kenya Revenue Authority for late payment of tax due to carelessness. There are uncontrolled large expenses in some departments of the company and internal performance contracts with departmental heads are not signed to date. Mr. Speaker, Sir, at a Board and senior management team building meeting in Mombasa in August, 2009, it became apparently clear to me that the staff relations were extremely strained, and that many of the senior managers were fearful, and not in touch"
}