The Kenya Petroleum Oil Workers’ Union (KPOWU) has asked the Capital Markets Authority (CMA) to suspend the ongoing recruitment of a new Managing Director at Kenya Pipeline Company (KPC), citing concerns over the legitimacy of the current board.
In a petition dated May 15, the union questioned whether the board overseeing the recruitment process is properly constituted following recent changes in the company’s ownership structure.
KPOWU argued that the government’s partial sale of its stake in KPC significantly altered the company’s shareholding and should have triggered a fresh reconstitution of the board before any major decisions are made.
The union warned that continuing with the recruitment of a Managing Director before restructuring the board could compromise transparency and accountability within the company.
“We write to formally petition the Capital Markets Authority regarding serious corporate governance concerns arising from the actions of the current Board of Directors of Kenya Pipeline Company PLC,” the union stated in part.
“Proceeding with the recruitment of a Managing Director prior to proper board reconstitution undermines transparency, accountability, legitimacy, and fiduciary responsibility expected under accepted corporate governance standards,” it added.
KPOWU further argued that the authority of the current board to oversee the recruitment could be challenged under provisions of the Companies Act 2015, CMA governance guidelines and the company’s own articles of association.
According to the union, KPC recently shifted from a public company to a private entity following changes in its ownership structure, meaning the governance framework and board composition should now reflect the new shareholder arrangement.
The petition comes just days after KPC announced changes within its leadership, including the exit of board members Sharon Irungu-Asiyo and Mohamed Birik Mohamed.
In a notice issued on May 8, the company said the changes followed legal and structural reforms that had redefined the company’s ownership and governance framework.
“The Board of Directors of Kenya Pipeline Company PLC hereby notifies shareholders, the investing public, and all stakeholders of changes in the Board of Directors and Senior Management of the Company,” part of the notice read.
The ongoing transition is expected to pave the way for the recruitment of new management at the company, a move that has now sparked opposition from the petroleum workers’ union.
KPOWU is now calling on the CMA to intervene and, if necessary, halt the recruitment process until governance concerns raised by the union are addressed.
