Kenya Power is under scrutiny as Auditor-General Nancy Gathungu questions the legality of the Sh26.82 million exit pay provided to former Managing Director Bernard Ngugi.

The payment, made following Ngugi's abrupt resignation in August 2021, is now revealed to lack necessary approvals from the State Corporation Advisory Committee (SCAC), raising concerns about its legality.

Gathungu highlighted that, "The payment was subject to approval by the Ministry of Energy and the National Treasury who both granted approvals on May 25, 2022, and April 11, 2022."

However, crucially, SCAC approval, as required by law, was not obtained prior to the disbursement of the significant gratuity.

Furthermore, the Auditor-General disclosed that the exit pay violated the company's staff regulations, stating, "The regularity of Sh26.82 million exit pay could not be confirmed."

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According to company procedures, employees who resign before completing their contracts are not entitled to gratuity or any terminal leave pay.

In Ngugi's case, Sh2.52 million of the exit payment was designated as in lieu of notice, even though he resigned without giving notice, and regulations dictate that he should have paid the company a notice fee of Sh2.28 million.

Gathungu's revelations suggest that Ngugi's departure was swift, possibly influenced by external pressures for a change in leadership at the utility.

Ngugi had left the company 15 months before the conclusion of his contract, leading to the appointment of Engineer Rosemary Oduor as the acting managing director.

However, Gathungu's findings indicate that the exit pay process was marred by irregularities, further emphasizing the hasty nature of Ngugi's departure.

The management shuffle continued as Oduor was later replaced by Geoffrey Muli after less than ten months in the office.

Eventually, in May of this year, Joseph Siror assumed the role of substantive managing director, nearly two years after Ngugi's exit.

Siror, previously the general manager in charge of technical services at the Kenya Electricity Transmission Company (KETRACO), took the helm at Kenya Power, concluding a series of leadership changes aimed at improving the company's financial standing in the face of persistent losses.

The Auditor-General's inquiry sheds light on the intricacies surrounding Ngugi's exit and raises questions about the adherence to legal procedures in the disbursement of such substantial exit payments within public enterprises.