Airways exposed the airline to Sh400 million loss by selling foreign currencies below market rates. KQ was also found to be buying fuel at inflated prices, in findings that point to thieving staff. Thirty-two transactions have been highlighted as highly toxic where the said officials colluded with bankers to sell the South African Rand and Emirati Dirham below the market prices. The banks would then discreetly give a kick-back to the KQ officials, in one of the many ways the airline is bleeding. “In addition KQ faced a potential loss of KES resulting from the sale of Sh4,750,000 resulting from the sale of ZAR 5 million at a lower rate of Sh6.75 to the ZAR as opposed to the market rate of Sh7.7 to the ZAR,” a leaked confidential audit report by Deloitte reads in part. ZAR is the South African Rand, one of the currencies that the airline receives payments for tickets sold by the agents in SA. KQ contracted audit form Deloitte to execute the forensic audit, looking into the internal weakness at the national carrier. And in another finding, top officials in the finance department inflated bank charges paid to Dubai Bank by Sh14 million, relating to a Sh700 million ($7 million) guarantee sought by the airline. “This facility was Sh155,900,000 above the board approved limit. The bank guarantee facility letter was signed by Mr Mbuvi and Mr Mbugua in their capacity as the CEO/MD and finance director respectively,” Deloitte said, citing that the officials breached the ceiling amounts for the size of bank guarantee approved by the Board of Directors. The airline allows the top management to access a maximum of Sh500 million in bank guarantees. It was also found that the airline in some instances did not receive revenues earned in different countries, only for transfers to be made to private bank accounts of the officials. READ MORE Nine Kisumu County staff sent home over loss of Sh45m Lionel Messi tax fraud trial begins in Barcelona Audit names KQ managers, lender and suppliers in scheme to defraud airline An officer identified as Itegi Githinji received Sh14.5 million, which was due to the airline, aside from Sh23 million secretly withdrawn from Dubai Bank - believed to be a kickback for the margins earned from the irregular forex repatriation. Skewed contracts Deloitte reports that the airline was buying fuel at prices that were significantly higher than market rates, owing to biased procurement procedures. “We therefore observed that KQ carried out its tenders within short periods and from January 2013 to July 2015 there were no tenders issued. Instead there were last-minute negotiations with the suppliers so as to manage the risk of not supplying after the contractual period,” the forensic auditors said of the fuel procurement since 2010. Fuel makes up 40 per cent of the airline’s direct costs in any financial year. “We also noted that this reactive procuring did not have a structured plan, failure to which the negotiations are limited hence KQ incurring a possible high cost.” It was also unearthed that the supply contracts for fuel were heavily skewed against the airline, and in some instances, the suppliers had not even appended their signatures on the agreements. Deloitte noted there was serious violation of the procurement performance management procedures by the fuel purchasing manager. “Should there arise any dispute between the airline and the supplier out of the process of supply of jet fuel, the airline will likely find itself inadequately protected and unable to enforce its rights and protections that should have been clearly laid out in the formal contract and a copy at hand,” Deloitte concluded.
:eek:
In Just one Paragraph?
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Kq na Lionel Messi connection ni gani?
buying the fuel at inflated prices may not necessarily point to thieving staff, I believe they hedged their fuel prices some years back {not sure for how long} when the prices were going up and never foresaw the drastic drop in prices that was to follow
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Greed, everybody wants to become a billionaire. I saw neighbours become millionaires during moi era, some were store keepers in govt and other were in petroleum business, but today they are paupers and their children are miserable. Dirty money does not last long enough to be enjoyed by ones children
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true but some is enjoyed by many generations
where is @Okiya ???