Linking Raila to the problems in Kenya Airways was erroneous and inaccurate

Last Sunday, Daniel Wesangula published a front-page news item under the headline “Former PM named in KQ cargo saga” in The Standard on Sunday issue of that day.

He continued with the story on page 4 and 5 of the newspaper under the headline “Raila named in questionable winding up of KQ’s profitable cargo arm”.

I complained to the management of The Standard Group that Daniel Wesangula had defamed Mr Odinga since the story was erroneous and written with the sole intention of linking the former Prime Minister to the ongoing crisis at Kenya Airways.

It is as a consequence of this complaint that the management of The Standard Group has set aside this space in today’s paper for Mr Odinga to exercise his right to reply.

The first glaring flaw in the story written by Daniel Wesangula is the time and the timing.

The events that Wesangula was attempting to analyse took place in the year 2004. That is 12 year ago. These events are made prominent in the middle of an ongoing debate regarding losses made by Kenya Airways in the years 2015 and 2016.

The reader gets the impression that the events of 2004 and 2015-2016 are contemporaneous which enables the writer to carry out his malicious motive; to link Mr Odinga to the Kenya Airways crisis.

This link is actually alleged blatantly and done in two steps. Firstly, Wesangula says that the shutting down of Kenya Airways cargo handing “may have contributed to the near financial ruin of the national carrier”.

Wesangula does not say how this could have been. He just says it does. But as I have stated, these events are 12 years apart. Wesangula owed it to the reader to show how a management decision made in 2004 came to be a contributor to the near collapse of the business more than a decade later.

But Wesangula does not establish even a tenuous link. On the contrary, the figures of KQ’s performance indicate that apart from the year 2009, the company made profits every year from 2004 to 2012.

It is logical to conclude that however inadvisable the decision by the Kenya Airways Board of Directors was on the “shutting down” of its cargo handling unit, it did not affect the profitability of the airline and is absolutely irrelevant to the over Sh70 billion loses that the company has accumulated since the year 2013.

But Wesangula not only says it is relevant; he says that in fact, Mr Odinga had a role to play. He wrote: “The cargo unit, Kencargo International Limited (KK), was shut down in 2004 and the cargo handling business outsourced to a competitor whose list of original shareholders includes the Orange Democratic Movement (ODM) party leader Raila Odinga, who also doubled as a KQ shareholder”.

Firstly, it is not true that the Kenya Airways cargo business was outsourced to Astral Aviation. The latter was but one of the many players in the cargo business at Jomo Kenyatta International Airport and they received business from Kenya Airways on the same footing with other airlines. There existed no exclusive business relationship between Kenya Airways and Astral Aviation and everyone benefited from business from Kenya Airways depending on their capacity, flight schedules and destinations.

Also not true was the impression created by Wesangula that Kenya Airways wound up its cargo business. It didn’t.

It wound up Kencargo, a tripartite joint venture between Kenya Airways, KLM cargo and Martinair. It then created a new cargo unit, which operates till today. But that’s another story.

In several places in the article, Wesangula raises the contemporaneous shareholding issue and suggests that it created a conflict of interest in which Kenya Airways was compromised.

Now, Kenya Airways has about 1.5 billion shares quoted and traded on the Nairobi Stock Exchange. The Kenya Government holds about 30 per cent of these and KLM holds about 27 per cent, to the nearest round figure. Between the two of them, they control the management of Kenya Airways.

Within the shareholding arrangement, KLM and the Kenya Government have a shareholding agreement, which gives KLM extra rights in the management of the airline particularly in matters concerning the business scope and finance.

Mr Odinga owns 4,036 shares in Kenya Airways. This amounts to about 0.00027 per cent of the total shareholding of Kenya Airways. At the time in question he also owned one share out of 1,000 in Astral Aviation, making 0.01 per cent of that company’s shareholding.

According to Wesangula, there was a conflict of interest because of this shareholding by Mr Odinga in both Kenya Airways and Astral Aviation.

The reasoning is so outrageous and in such brazen fashion that it could not have been put forward for any other reason than to besmirch Mr Odinga’s character.

KLM itself is a competitor of Kenya Airways yet it holds about 27 per cent of the latter’s shareholding, sits on its board and has veto power on some Board decisions. Yet this does not ipso facto create a conflict of interest.

Yet besides this beyond negligible shareholding, Mr Odinga did not sit on the board of Kenya Airways nor have any role or influence in its management.

Wesangula then suggests that other directors and employees of Astral Aviation had a conflict of interest due to contemporaneous shareholding in Kenya Airways.

He names a Mr Gadhia Sushila and Mr Mansokhal Gadhia and says they held 2,018 shares in Kenya Airways.

This shareholding is 0.000135 per cent of the total Kenya Airways shareholding.

A conflict of interest arises when a person who is in a position of trust and therefore under duty to act to the benefit of that trust exploits their position for a personal benefit to themselves.

The facts that were before Wesangula did not justify him to make a mistake about this issue, let alone reach a conclusion that Kenya Airways interests were compromised by a conflict of interest on any one party, even KLM. So why did Wesangula do this? Why would an internationally respected features writer want to ruin a reputation painfully earned by writing such a scurrilous news article based on manifest and deliberate misrepresentations? Mr Odinga leaves it to him to search his soul and conscience regarding the embarrassment and emotional distress he visited on him and his family. For Hon Raila Odinga, this reply puts this issue to rest.