The future of the once prestigious Nairobi Club, the second private members’ club in Kenya, hangs in the balance if current happenings at management level are anything to go by.
The major problem at the club is embodied in some of the various committees that preside over the management of its affairs, committees that have performed dismally and taken over executive roles in contradiction to the board charter of the respected club.
Several board members appear to have nurtured an insatiable appetite for personal interest, irregularly taking over executive roles in total disregard to the charter’s by-laws.
Blatantly shrouded in vested interests, the position of chief executive officer at the club has elicited a high turnover, with no holder lasting a year. The CEO plays a very vital role of being firm and regularly reminding the board of their oversight roles.
This perhaps explains why the board will naturally be hesitant working with such a CEO. The overriding interests at the board have occasioned the loss of millions of shillings estimated to run up to Sh120 million.
Unfortunately, majority of the club members have no information of many underhand dealings. Often limiting themselves to their core business – come, socialise and leave – the vulnerable members hardly attend annual general meetings, allowing a few selfish individuals to mobilise their supporters to elect them to the lucrative board.
In April 2018, the chairman of the then main committee Julius Koros, requested Joseph Chacha, a senior member of the club, to come on board as caretaker CEO for a six-month period.
Chacha’s hiring was earmarked for turning around the club’s fortunes as well as instilling discipline in staff and members, to effectively seal all avenues of seepages that were leading to heavy losses at the club.
The former CEO by then had been sacked due to the vested interests characteristic of the board. By that time, the board was divided on the appointment of the CEO. The career military executive took over and within three months, he had put in place all control measures, sealed all loopholes, instilled discipline and acted upon audit reports in which some staffs were dismissed for theft and gross misconduct.
Chacha worked overtime to unearth massive procurement malpractices involving some board members. The board was split right through the middle, with the caretaker CEO being seen to belong to the chairman’s camp, and branded pro-moderate group.
The situation got worse until a special general meeting was convened in line with the by-laws on December 13 2018. Chacha was handed a contract extension of another three months to facilitate the SGM.
During the SGM, members voted out the entire board and elected an interim board to run the club until the AGM in May 2019. Three ousted board members, including the then club president, went court to challenge their removal.
Members wondered why a volunteer should go to court to continue volunteering. No sooner had the seven-member interim committee met than there was a major split popped up. Interim main committee chairlady Ludmila Shitakha suffered a rebellion from five members harbouring their own designs on the club.
It was then that the CEO Chacha stood firm and refused to allow another illegality to take place. At the centre of the heat was a contract of a billboard firm. Five members wanted the contract cancelled and awarded to their preferred firm while the chairlady stood firm and avoided a court case by canceling a legally signed document. Chacha got another four-month extension to facilitate an AGM.
Before an AGM, members nominate themselves to be considered for election to the board. Their nomination is vetted by the current board that clears those members who have no discipline issues.
Any member with a discipline issue is not approved to contest in the elections. The CEO Chacha had issued discipline letters concerning for club members who had serious issues namely: lawyer Steve Biko, Edwin Rono, a medical doctor, Vicky Tumbo, a credit officer with Vivo Energy and Yvonne Tharao, a marketing officer with Madison Insurance. The indicted lot is part of WhatsApp group going by the name Nairobi Club Professionals.
The disciplinary issues ranged from insults, propaganda, incitement, character assassinations, breach of confidentiality and illicit relationship with staff among others, which had also been reported to DCI and now subject of investigations.
Despite the CEO’s vehement opposition to the four members from being cleared, the interim committee’s majority allowed them to vie irrespective of discipline. In the meantime, a forensic audit by KPMG, who had been paid Sh4.2 million to audit the club and trace the path the loss of more than Sh100 million had taken got down to work.
The KPMG findings would later finger some members vying for board positions for being part of the loss. Efforts by the CEO to highlight that met resistance. Eventually the new board came in with all the indisciplined members being elected.
They used their cronnies to vote them in and took advantage of the larger membership never attending AGMs. During the AGM, members stated clearly that anybody adversely mentioned in the KPMG report should not be on the board.
In spite of having been adversely cited, Biko went on to join the board, forcibly. Chacha’s contract ended on May 31 2019 and he had to leave on May 27 due to the hostile reception from the four members he had opposed from contesting and had equally written discipline letters to.
No sooner had the new board taken office than squabbles set in. According to the by-laws, one has to be of a profession similar to what the subcommittee does to be eligible to chair it. But Edwin
Rono, a career doctor, forcibly took the finance docket chair.
In the same vein, Biko, a lawyer, forcibly took the HR and procurement docket. Chairman of the board Luke Musau took executive powers of the CEO even when there was an acting CEO, Wycliffe Adem, a mere rubber stamp.
Due to many governance issues touching on hijacking of executive powers, forcible takeover of professional subcommittees and gross indiscipline, resignations by liberal members set in. These include Minnie Mbue, Joseph Kering, Azu Ogola, Allen Kimani and Yvonne Tharao.
In the history of Nairobi Club – 120 years of existence – there has never been such kind of issues arising from the board. That members with discipline issues can force themselves to be nominated for election to the main committee (board) contrary to club rules and by-laws is, to say the least, astounding.
That a member adversely mentioned in the KPMG forensic audit report forced himself to the board; that a medical doctor forced himself to take control of the finance docket; a lawyer forcing his way to take control of HR and procurement; the board incorporating a female member with disciplinary issues; and board members forcing management to take compulsory leave.
This is the board that has failed to recruit a CEO due to vested interests four months down the line, while performing duties of the CEO; the only board that has reinstated sacked staff on skewed basis.
This is the only board that has shelved KPMG report which has mentioned some of them negatively yet KPMG was paid Sh4.2 million to pinpoint issues affecting the club and causing it to sink further.
A board that consists of members of low moral standards with illicit affairs with subordinate staff; the only board where a board member can convene a disciplinary meeting on a Saturday, comes to the meeting drunk and holding a glass of whisky, delays staff past midnight in the name of conducting hearings contrary to his role as a board member and against labour laws.
As things stand, the committee cannot conduct any club business as constituted, having only four elected members.
Pressure is piling on the club president, to convene an urgent meeting of senior club members – past club presidents, chairmen and other members – to salvage the club by immediately appointing a caretaker committee.
Credible reports now say past club presidents and chairmen are scheduling a meeting to discuss the pathetic state of the board.
Ever since the AGM of May 2019, the club has never been the same again. The AGM reportedly ushered in a committee that had personal agendas as opposed to serving club members. Four members elected had serious discipline cases complete with letters to the interim committee on their character.
The four controversy-riddled members have gone further and reinstated five indicted staff who had serious discipline issues. The reinstatement was illegal, with the board lacking the mandate. The sacked employees were paid their dues before leaving without appealing.
The Nairobi Club Four went on to suspend nine management staff and further forcing them to take compulsory leave on flimsy grounds. Unknown to many, the real reason is to hit back at them for revealing issues during the KPMG forensic audit in which one current board member featured prominently.
Debts, mismanagement and infighting among board members are the catchwords now defining the once prestigious club on the speed dial to the deathbed. Founded 120 years ago for senior Railway and colonial employees, Nairobi Club has been the members’ club of choice for the who is who in Kenya since then.
Raila
It boasts of Raila Odinga, Chief Justice David Maraga, Sam Nyamweya, top judges, lawyers, doctors and engineers as among its members. Just the other day, the club’s main bank account was frozen over a Sh5 million debt, putting its operation in jeopardy.
A contractor Top Choice Limited won court orders freezing Nairobi Club’s bank accounts over the Sh5 million unsettled debt. The firm installed CCTV systems at the club at a cost of Sh13 million but was yet to be paid in full, forcing it to move to court. Nairobi Club had paid Sh8 million but failed to pay the remaining Sh5 million.
Top Choice Limited is one of the many suppliers and contractors pursuing their payments from Nairobi Club. The members club, based in Nairobi’s Upper Hill, owes suppliers and contractors more than Sh80 million in pending payments.
According to documents in our possession, the club now faces a bleak and uncertain future.
“The club is in debt to the tune of over Shs 100 million,” whispered a board member of the club, who requested to remain anonymous.
Chief Justice David Maraga
Infighting among board members has also run the club to its knees. According to our source, some board members engaged in unethical and corrupt dealings.
“Some board members have performed dismally and took over executive roles in contradiction to the board charter. Several board members developed self interest in their areas and completely took over executive management roles in total disregard to the bi-laws and board charter,” he said.
Five board members, out of nine elected members have resigned in a span of three months into office. Some of the resignation letters in our possession paint a very grim picture of the club. “The decision of the board, to accord itself executive powers, in my view, amounts to a secret coup against the membership of the club,” says Kering in his resignation letter.
“One person cannot appoint the board chairman to take over as acting CEO. Even if the board was to make the decision, he or she has to switch roles from oversight to executive, step down,” he said.
Another resigning member stated: “The board is supposed to be oversight, supervisory and decision-making organ. Implementation is the work of management,” says Allen Kimani. The board even fought for portfolios.
Information has it that some board members have even reinstated some of their friends and relatives who were earlier sacked or dismissed on theft and other discipline issues. Inside sources indicates that there is harassment of management staff who gave information to the forensic auditors. Some board members are said to have suspended them, later forced them to go on leave and carried out disciplinary hearing in total disregard to the board charter and labour laws.
Another problem is the jostling and fighting for the CEO’s position among the club’s board. The underhand dealings have remained unnoticed by some senior members of the club.
Former KFF boss Mr Sam Nyamweya
Just the other day, the club’s board is operating without a quorum after five of its eight members resigned in a span of three months. Members are highly concerned on the state of affairs in the club.
Nairobi Club is run by a main committee (board) that comprises of a chairman and eight members. It has a ceremonial president whose role is purely advisory in nature and a symbol of unity in the club. Each board member becomes the chair of a subcommittee which plays an oversight role on the activities.
These subcommittees include finance, strategic and ICT; HR and procurement, works and projects; members services, governance, health and security gymkhana; audit and balloting.
Each subcommittee makes resolutions in their areas of responsibilities which must be ratified by the main committee (board). Management comprises of the CEO who reports to the board, management staff and union staff.
Club members nominate themselves to be elected in the main committee on volunteer basis. The objective being to bring on board traits and skills they have in relevant subcommittees and add value in club management.
The current main committee vets the applicants and checks to see that they meet requirements of the by-laws and rules. They vet to ensure that they have the required skills to bring on board. They also vet to ensure that none has any discipline case in/out of the club.
Those selected are nominated for elections during the AGM. The CEO and senior managers are board appointees after all recruitment process has been done. Any other appointee is done by management under the close eye of the HR subcommittee
