July 16, 2018 / 1:45 PM / 8 months ago

UPDATE 3-Kenya Power's CEO charged in court over economic crime

(Updates with acting CEO appointment)

By Humphrey Malalo

NAIROBI, July 16 (Reuters) - Kenya Power named Jared Omondi Othieno as acting chief executive on Monday after CEO Ken Tarus was charged with conspiring to commit an economic crime and abuse of office.

Tarus, the head of the state-controlled power distributor, is the latest high-profile figure to be prosecuted in the country’s corruption crackdown.

He was charged in court alongside his predecessor, Ben Chumo, and a number of other senior managers at the company .

They denied all the charges.

Reuters could not immediately reach Tarus for comment. Chumo denied any wrongdoing when contacted by Reuters.

Energy Minister Charles Keter, who announced Othieno’s appointment, said the company’s operations would continue as normal. “The interim management team will be in office for three months as we conclude the restructuring programme,” he said in a statement.

The interim senior management team will run the company pending the hearing and conclusion of ongoing court cases against previous managers.

Tarus and his fellow executives at Kenya Power are accused of entering into a contract with a private firm for the supply of transformers, which turned out to be faulty.

Prosecutors said this deal also flouted procurement rules for state entities.

The company which got the contract, Muwa Trading, was also charged in court on Monday along with three of its directors. These directors denied the charges.

Kenya Power’s board said its business operations would not be affected after the arrest of Tarus and the other senior managers.

“The company has in place a business continuity strategy hence all operations will continue normally,” the board said in a statement on Monday.

Its shares fell 0.76 percent to trade at 6.50 shillings ($0.0648) each.

Kenya’s Directorate of Criminal Investigations arrested the Kenya Power managers at the weekend. Their lawyers are seeking bail.

The Director of Public Prosecutions’ office has said it planned to charge managers and officials from eight companies in relation to the investigation.

Dozens of Kenyan government officials and business people have appeared in court in the past three months to face charges relating to the alleged theft of hundreds of millions of shillings from public coffers in a new drive to tackle corruption.

President Uhuru Kenyatta, who was sworn for a second term last November, has faced criticism for failing to fight graft during his first term despite a pledge to root out the vice when he was first elected inn 2013.

He has ordered lifestyle audits for all government officials as part of the renewed attempt to battle corruption.

$1 = 100.2500 Kenyan shillings Additional reporting and writing by Duncan Miriri; Editing by Omar Mohammed and Jane Merriman

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