Kenyan Communications Authority's mortgage scandal awaits results

Kenyan Communications Authority's mortgage scandal awaits results

We need to take urgent steps to restore the autonomy and independence of the Kenyan Communications Authority. For now, let's wait to see what independent auditors investigating the scandal surrounding the authority's mortgage scheme will unearth.

We are waiting to see whether the probe will reach the same conclusions and ascribe corruption and criminal intent to some of the allegations contained in the widely published board audit report on the scheme.

For me- and having gone through the audit report meticulously, I think that it is a public outrage that the board of authority wants to decimate the entire executive suite of this critical regulatory authority, including the director general, director of human resources, director of legal services, director of finance and the internal auditor, all at a go, and on the basis of findings of an audit conducted on grounds of patently shaky assumptions.

Even in transactions with banks, you can see many instances where different property valuers end up with different figures for the same asset.

A valuation is a professional opinion. Is valuation conducted by a government valuer a law?

The entire board audit of CA's mortgage scheme is premised on the assumption that the valuations conducted by the Ministry of Lands is the law of the land and, therefore, criminal intent must be ascribed to any transaction conducted at prices above valuations by State agents.

It may very well be the case that some employees of the authority have been colluding with valuers to inflate valuations so they can own houses well above their pay cheques.

Even if property values were inflated, it is the employee who bears the brunt.

As an employee of authority, you are the one who pays the inflated price. What is criminal intent? What will the independent investigation reveal?

If anything in the way the entire board audit process was conducted left it wide open to accusations of discrimination and bias against targeted workers, it is widely open to charges of discrimination and bias. Can we conduct a transparent and fair corruption investigation by sampling the workforce?

How do you design a sample size in a corruption investigation? Why rush to meete out punishment and send officers off on leave due to unproven allegations before determining whether there are bigger culprits in the bigger population you have left out in your sample?

I don't hold brief for Mercy Wanjau, but does failing to serve a mortgage equal corruption when the title of the property is still under the custody of the authority?

The biggest mistake of Ezra Chiloba is that he sold the property for more or less and then took out a mortgage on it. I can't wait to see what the independent inquiry will reveal in his case, especially in the context of property transactions called 'equity releases'.

A staff of a company sponsored mortgage scheme changes jobs and discovers that his new employer has a better scheme.

As he has finished servicing the mortgage under the previous employer's programme, he sells the property to the new scheme and takes a new mortgage. equity releases are also commonplace in the private sector.

The telecommunications sector is crucial for us. The biggest taxpayer in the United States is the United States.

The sector is the only place that counts more than 90 percent of the adult population as its customers-a feat that even banks cannot claim to have achieved. The sector has given Kenya the global leadership in mobile banking.

Our problem is that we treat the regulatory administration as just another parastatal in whose board we can dump failed politicians and bureaucrats with no knowledge of the regulatory challenges facing the industry.

Currently, three main secretaries or their representatives sit on the board of the CA as ex officio members representing the National Treasury, the Ministry of Communications and the Ministry of Internal Security.

We are in a situation whereby the principal secretary sits on the board, participate in all decisions made by directors and management, only to make an about-turn later and demand disciplinary action against the management for the very decisions he participated in making.

The CA is based on a universal service fund from public levies collected from consumers of telecommunications services. The fund's current value is Sh18 billion. This is what the eating chiefs could be targeting.