Parliament questions CMC chief executive’s contract.


The shareholder wrangles at auto firm CMC on Thursday took a new turn after Parliament was told that CEO Bill Lay was in the country illegally.

MP Boni Khalwale said that Mr Lay got his entry permit unprocedurally after the Immigration ministry rejected his application.

The allegation came as Finance minister Uhuru Kenyatta tabled a letter showing that Mr Lay was in the country legally, but Dr Khalwale said his entry permit was issued four days after an earlier application had been rejected.

“Mr Lay relied on political patronage of this administration to get the permit after it was first rejected,” Dr Khalwale told MPs.

Mr Kenyatta said he was not aware that Mr Lay’s application had been rejected, adding that the matter can only be explained in details by the Immigration ministry headed by Otieno Kajwang’.

Yesterday, Mr Lay — who has worked in Kenya’s auto industry for the last 40 years — said his work permit was clean and that details emerging in Parliament over his employee status are “lies.”

Dr Khalwale sought to know what the government was doing to protect the interest of 14,000 ordinary shareholders caught up in the CMC boardroom wars.

The Capital Markets Authority (CMA) has suspended CMC’s shares until January 27 as it investigates claims of fraud that saw Mr Peter Muthoka, the single largest shareholder, replaced as chairman by Mr Joel Kibe on September 8.

Ousted chairman

Mr Muthoka is the chief executive and a major shareholder in Andy Forwarders, a logistics firm that Mr Lay has accused of overcharging CMC to the tune of up to Sh2 billion over the past five years.

The ousted chairman, who has a 24.7 per cent stake in CMC, has denied the allegations and sued Mr Lay for defamation.

He has also called for an extraordinary general meeting in a bid to kick out Mr Lay and three other directors from the auto dealer’s board.

But CMA has obtained orders temporarily stopping the EGM and the matter is in court.

This is the second time Mr Khalwale and Kenyatta are facing off over the auto dealer.

In November 2009 Mr Khalwale, then chairman of the Parliamentary Accounts Committee (PAC), summoned Mr Kenyatta over the government’s decision to pick CMC’s Volkswagen Passat car as the ideal replacement for fuel guzzlers like Mercedes and Range Rovers. CMC had already supplied the government with 130 units of the cars at a cost of more than Sh400 million.

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