KQ building case against fraud architects

The Kenya Airways (KQ) board is building a case against those involved in financial impropriety that led to massive losses at the airline.

Kenya Airways Board Chairman Dennis Awori said preliminary investigation from the Deloitte forensic audit show that there are serious cases of fraudulent activity that led to massive revenue losses for the airline.

Of concern are fuel procurement, revenue management, aircraft maintenance and ticketing where cartels had formed to divert money from the airline.

“In the course of our investigations, cases of fraudulent activity have come to light that could have caused losses to the airline over a period of time. The board has taken necessary action at various levels including disciplinary action termination of staff found culpable and launching further investigations which may lead to criminal and civil prosecution,” Amb Awori said.

The remarks come as the draft report from Deloitte leaked to the media painting a grim image of how missteps by management and employees may have led to operational inefficiency.

KQ posted a full year loss of Sh26 billion despite putting in efforts to revive the airline.

The airline however declined to indicate how many employees had been involved in the financial mess as well as how much had been lost during the six year investigation period.

“The board cannot at this point give specifics of persons and amounts involved as this may jeopardize the case files under preparation,” he said.

Other areas under investigation include the procurement of new aircrafts, the use of special purpose vehicles, the disposal of assets and inaccurate baggage billing.

The preliminary report indicates that in one case KQ bought two planes at Sh2 billion only to sell them off later at an undervalued figure of Sh210 million

KQ management has been implementing tighter controls to improve its operations.

Amb Awori said the airline wants to build a water tight case against those who bear criminal liability.

KQ instituted a recovery plan dubbed Operation Pride in 2015 to steer the airline back to profitability.