Week of October 23

KICKING OFF CHANGES AT KENYA POWER 

LISTEN IN: The Kenya Power and Lighting Company has asked shareholders to log into a live stream at 10 am on Tuesday, October 24, for a briefing on the latest proposed changes to its Articles of Association. The link will be shared on Monday. 

MAJOR CHANGES: Shareholders have been invited to attend an extraordinary general meeting of the power distribution company on November 10 where they are expected to vote on a number of changes. If they agree, the company will have a maximum 10 and minimum seven directors on the board. It currently has 11, two of them alternates to the Cabinet Secretary and the Principal Secretary to the Treasury. The board will now have at least a third of members as independent non-executive directors. In the notice for the meeting, Imelda Bore, the Company Secretary, says the changes to the numbers are to adjust the number of directors to accurately reflect the company’s shareholding structure. It will also allow for the variation of rights to shares. 

SHARE CLASSES: There is also a proposal to classify shares.  

• Class A: Ordinary shares held by shareholders, excluding those held by the National Treasury. Entitled to elect 4 board directors.
• Class B: Ordinary shares held by the National Treasury. Entitled to appoint the remaining directors.

Both Class A and B shareholders will enjoy the same rights and privileges, except concerning the nomination and election of directors.

These changes are designed to establish equitable representation for both majority and minority shareholders on the board, aligning with the principles of best corporate governance practices.

The top 10 shareholders at KPLC as at 30th June 2022

1. The Cabinet Secretary to the National Treasury – 50.086%
2. Standard Chartered Nominees Resd A/C Ke11450 – 1.665%
3. Nyoro, Samson Ndindi – 1.397
4. Standard Chartered Nominees Non-RESD A/C Ke11794 – 1.232%
5. Hirani, Naran Khimji & Hirani, Virji Khimji – 1.221%
6. Kenya Commercial Bank Nominees Limited A/C 915B – 1.172%
7. Access Alliance Limited – 0.845%
8. Stanbic Nominees Ltd A/C NR79701 – 0.813%
9. Shah, Mahendra Kumar Khetshi – 0.564%
10. Parmar, Atul – 0.555%

WHAT NEXT: The changes at the power distribution company could herald significant changes, not least at the board. As Kenya’s sole power distribution company, Kenya Power is a tower of interests.

ANOTHER STAB AT UNIVERSAL HEALTHCARE COVERAGE

ASSENT: Fresh from his China visit, President Ruto has signed off on changes to the health sector by assenting to four bills that will effect far-reaching reforms in the public healthcare sector. The four new laws: The Social Health Insurance Act, The Digital Health Act, The Primary Healthcare Act, and The Facility Improvement Financing Act are the first stage of fulfilling the promise by the President to make healthcare accessible and affordable to every citizen. 

FAR-REACHING CHANGES: With the passage and assent of the Bills, the country’s healthcare sector is bound to undergo a number of changes. Most notably the National Health Insurance Fund (NHIF) will be disbanded. There has been uproar more so from Nairobi Senator, Edwin Sifuna, who raised a motion seeking to understand the plight of the employees of NHIF. The government insists that the NHIF employees will seek employment afresh from the newly created bodies. 

NEW PREMIUMS: Keen to look out for will be the Regulations to this set of laws which will outline the premiums that will be paid by Kenyans. The most mentioned proposal was to increase the monthly payments by the salaried to 2.75 per cent of their salaries. 

TALKING OF WHICH

CYTONN AGAIN: If it goes by the recommendations of the National Assembly, the Directorate of Criminal Investigations will begin an investigation into Cytonn Investments. The House last week unanimously endorsed the recommendation to initiate a thorough investigation into the affairs of the company. The House acted on a petition submitted last year on Cytonn High Yields Solution, a fund the company had started to invest depositors’ money in real estate. 

ACTIONABLE: As they debated the petition submitted by Alego Usonga MP Samuel Atandi, legislators lauded the Public Petitions Committee for coming up with recommendations that are enforceable. Minority Whip Junet Mohammed was however against the report, arguing that there was a need to separate the Cytonn CEO Edwin Dande, from Cytonn, which was registered as a company. 

Key recommendations of the Report include: –

1. The Directorate of Criminal Investigations undertakes thorough investigations on the matters listed hereunder within 90 days from the date of the adoption of the Report ;
2. The affairs of Cytonn particularly on the matters raised in this petition and 
3. The relationship between officials of Cytonn and the Capital Markets Authority between the period of 2015 and 2021;
4. The business dealings of the 49 SPVs including their assets and liabilities if any; and the business dealings of Mr. Edwin Harold Dayan Dande including his assets and liabilities. 

BUT: Cytonn has been the subject of litigation and investigations since its establishment so it will not be the first time there is an attempt to get to the bottom of its issues and find culprits. With Cytonn High Yields Solution, the company was accused of investing depositors’ money in an unregulated fund without giving them adequate information. 

WATCH OUT FOR 

REVENUE COLLECTION: The National Assembly’s Departmental Committee on Finance and National Planning is planning to have a stakeholder meeting with the Kenya Revenue Authority to discuss the revenue collected during this financial year’s first quarter. The committee is keen to establish whether the revenue enhancement measures it endorsed via the Finance Act are working. There have been credible concerns about the administration of the advance Excise Duty on alcohol, for example. 

DISCUSSIONS ON THE DOLLAR: The Committee is also planning on meeting with the Central Bank of Kenya to discuss the crippling dollar shortage in the country. 

KEEP ROLLING: The National Dialogue Committee has had a seal of approval from the Senate to have its mandate extended. This is after a motion by Sen. Okong’o Mogeni was approved. This motion will also be tabled before the National Assembly for concurrence whereupon the Committee will continue with its mandate as it seeks to crack the contentious issues raised by both Kenya Kwanza and Azimio, more so on the reconstitution of IEBC. 

REVERSE GEAR: The National Assembly has started considering a change to the law on university admissions. The Universities (Amendment) Bill seeks to provide a framework on the exclusive placement of government sponsored students in public universities. It further seeks to remove private universities from the Board of management of Kenya Universities and Colleges Central Placement Service to safeguard the Universities Fund. 

IN OTHER NEWS

G7: Cabinet Secretary for Investments, Trade and Industry Rebecca Miano has been invited to participate in the G7 Trade Ministers’ Summit slated for October 28th in Osaka, Japan. The summit brings together international ministers of trade to discuss the promotion of open trade and resilient supply chains. CS Miano will also participate in the Japan-Kenya Business Round Table on 27th October 2023 which aims at elevating Kenya’s profile as an investment destination.

MOVING UP

Mrs. Esther Ngari, formerly the Acting Managing Director & Council Secretary at Kenya Bureau of Standards is now the new Managing Director following a special gazette notice issued on Friday, 15th October 2023.