Kenya Power has issued a formal notice summoning an Extraordinary General Meeting (EGM) scheduled for the 10th of November 2023. The power distributor is in the process of revising its Memorandum and Articles of Association. A key agenda during this EGM is to seek approval from shareholders to restructure the makeup of its Board of Directors.
Presently, the government holds the majority share at 50.09% of the company’s shares. In the envisioned restructuring, the majority shareholder will have the authority to appoint five directors, while the remaining shareholders will have the privilege of electing four directors.
The company claims the move aims to protect the interests of minority shareholders. Kenya Power says the new board composition will reflect the company’s shareholding makeup.
A proposal to restructure the board composition is quite ominous. Perhaps, portending of things to come, the EGM has been called just a week after President Ruto assented to the Privatisation Bill 2023. This bill gives the Treasury the right to sell publicly owned businesses without needing the approval of the National Assembly.
Furthermore, the government of Kenya has been under pressure from external donors to restructure public sector institutions. In May, the World Bank Group Board of Directors approved a Development Policy Operation (DPO) for $1 billion to provide low-cost budget financing to Kenya. Part of the conditions for the funds was institutional reforms in the country.
“In governance, the DPO supports an important set of initiatives to promote objective decision making through the Conflict-of-Interest Bill, to streamline the state’s orderly exit from commercial investments through amending the State-Owned Enterprises Privatization Act,’ wrote the World Bank on its website.