Saturday, September 17, 2011

CMC: clear the fog

It is said in war, the first casualty is truth/facts.
These are gaps in the information:
  1. Peter Muthoka was selected chair in May and the BoD had all the information they have today, why didn't the conflict of interest issue arise then?
  2. Why did Bill Lay announce he was retiring from GM whilst denying he was doing so to fill the vacancy at CMC? Why did he jump from a big player to a smaller player (in market share terms)?
  3. If the apparent fraud is over-invoicing, why isn't the ex-FD and ex-CEO also in the dock here given that it is the responsibility of the payer to verify the invoice? Why isn't the auditor also in the dock since this would be part of its attestation?
  4. If the fraud is charging above what other players in the market (say GM) are charged, (a) that is not fraud (b) his contract would presumably have been verified by the BoD (which has included among other Joel Kibe)...
  5. Andy Forwarders (Peter Muthoka's business) also manages GM's supply chain and those of others, why would he charge CMC more? AFS has been supplying CMC for 17 years, why is the issue limited to 5 years?
  6. If as rumoured, Peter Muthoka was opposed to Bill Lay's appointment, is this merely the continuation of boardroom wars.
  7. If corporate governance is the issue, why not go all the way and require BoD to be composed of more independent directors instead of shareholders as it now is (with exception of the banks)?
CMC-a brief history:
Cooper Motor Co. started life as a retail outlet for Land Rovers/VW during the wabeberu days and today pretty much covers the whole upper class, settled middle class. During the Africanisation programme of the 1970s, it got some of the newly minted Kenyans on-board. In effect most of the plutocracy formed themselves into two chamas, Heri and Africa Liaison Company (Mwai and Moi were members as well as Njonjo). Overtime, Alico birthed other smaller entities among them Kingsway Nominees (which now know more as a Jeremiah Kiereni front). As with TCL today, the primary purpose of these chamas was to amass solid businesses such as CFC and CMC and also create some such as Heritage Insurance and so forth. Apart from their "financial nous", these elite gave their invesmens direct access to contracts. They'd then hire competent managers (usually a mzungu or mhindi) to manage the turnover and do the counting. Martin Foster joined as a Sales Director in 1978 stayed on and became CEO 8 years later and was virtually there until this year. The BoD effectively the bedrock on which Forster was pure old boys. Up until two or so years ago, everybody was over 60yrs.
However, over the last few years, they have all reduced their shareholding allowing the likes of Mobicom, Peter Muthoka to takeover the reigns and its apparent that this is a battle for who between Mobicom and Peter will control CMC. CMC currently holds just under 20% of motor sector market share behind Toyota and GM.

1 comment:

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