MPs question procedure in Sh24bn KQ loan swap

MPs question procedure in Sh24bn KQ loan swap

Kenya Airways CEO Allan Kilavuka and Treasury PS Julius Muia during a Public Accounts Committee in Parliament to answer audit questions on January 24, 2022/EZEKIEL AMING’A MPs are questioning the procedure of conversation of Sh24 billion loans to equity at Kenya Airways.

The National Assembly Public Accounts Committee wants former Treasury Principal Secretary Kamau Thugge to physically appear before it to explain the gaps in the transaction.

The oversight committee wants the ex-PS to shed light on how the transaction was arrived at and whether it was approved by Parliament as required.

Last year, Kenya Airways CEO Allan Kilavuka told the committee that the Cabinet approved the debt conversion in June 2017

PAC chairman Opiyo Wandayi said the transaction, which was flagged by Auditor General, is suspect and exposes public investment to losses.

“Was the approval brought to Parliament before you did the conversation? Do you have evidence that it came to Parliament and was approved?”

He added, “By conversation of the loan to equity you exposed the taxpayers’ investment. In case Kenya Airways is liquidated, the public will lose their investment.”

Funyula MP Ojiambo Oundo described the conversation a risky venture which put at risk public investment at the national carrier.

Oundo argued that should anything happen to Kenya Airways, then the entire investment running into billions is lost.

“The people of Kenya will lose substantial amount they have invested in Kenya Airways over the years,” said the Funyula lawmaker.

Wandayi on the other hand said the manner in which the loan swap was executed shows a deliberate effort of people playing games with taxpayers’ money.He said the committee will dig into the transaction with a view of ascertaining the procedure that was followed in the multi-billion shilling deal.The committee was meeting Treasury PS Julius Muia and Kilavuka.The PS however defended the deal saying it was necessary for the survival of the airline.Suna West MP Peter Masara questioned the need of continued investment in the airline despite the huge losses it continues to make.According to Masara, the airline is not providing value for money to the taxpayers despite heavy investment.But Kilavuka dismissed the argument saying the airline despite the losses is strategic to the growth of other critical sectors of the economy.“A lot of national carriers are making losses but they are put strategically to support other sectors,” Kilavuka said.

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