Ezekiel Mutua ordered to return Sh27 million in salary overpayment
news

Ezekiel Mutua ordered to return Sh27 million in salary overpayment

The State Corporations Appeal Tribunal has ordered former Kenya Film Classification Board (KFCB) CEO Ezekiel Mutua to return Sh27 million, which he received as an irregular salary increase during his second term in office.

According to a ruling seen by Julisha.co.ke, Mutua’s salary was increased by the KFCB board from Sh348,840 to Sh1,115,850 at the start of his second term — a decision made without the authority of the Cabinet Secretary. This salary adjustment, applied over three years, saw him earn a total of Sh27,612,360.

The Inspector General of State Corporations, invoking powers under Section 19 of the State Corporations Act (Cap 446), investigated the matter and surcharged Mutua for the full amount, citing it as a loss to the public.

Mutua appealed the decision, but the tribunal upheld the surcharge issued by the James Warui-led Inspectorate of State Corporations and directed him to repay the Sh27 million to the government, stating the increment was nearly three times his previous salary and was unlawfully granted.

The Inspectorate told the Tribunal that Mutua’s term was irregularly and unlawfully renewed without consultation or approval from the Salaries and Remuneration Commission (SRC), the State Corporations Advisory Committee (SCAC), or the relevant Cabinet Secretary — actions that resulted in the misuse of public funds.

"Inspectorate of State Corporations noted that the board's decision to increase the CEO's salary ... on a 'personal to self' basis was unlawful and irregular and that Mr Mutua ought to be surcharged as a consequence, having sat in the Board and benefited directly," the documents state.

He further argued that, to ensure uniformity across the public sector, the government routinely issues circulars to guide the implementation of the SRC Act.

The ruling also revealed that the Cabinet Secretary for Sports and Heritage had opposed the renewal of Mutua’s term.

In a letter dated May 29, 2018, the Cabinet Secretary stated that he had no intention of renewing Mutua’s contract.

"However, and contrary to the Cabinet Secretary's response, the board, through a letter of June 7, 2018, went ahead to renew the contract of Mr. Mutua as the CEO for a further 3 years with effect from October 26, 2018," read part of the ruling.

After renewing Mutua’s term, the KFCB board instructed the Human Resource and Administration Committee to review his past performance and provide recommendations on a possible salary increase.

Differing views.

According to the ruling, during a meeting held on January 31, 2019, the human resources subcommittee expressed differing views on the proposed increment. Despite this, the majority of the board approved the salary raise.

Later that same day, the board wrote to the Cabinet Secretary seeking approval to implement the decision. However, in a letter dated April 30, 2019, the Cabinet Secretary declined to approve the salary increase.

"The Cabinet Secretary also directed the board to recover any amounts that may have been paid in respect of the proposed salary increment in case the board had implemented it.....From the facts of the matter, it appears that the Board never implemented the directions of the Cabinet Secretary to stop the increment and recover the amounts that may have been paid, which then gave rise to the instant matter."

In his defence, Mutua argued that the board granted him a second term and approved the salary increase, and therefore, he was not personally at fault.

He added that he continued to work and receive the salary without any objections, reservations, or queries from the Cabinet Secretary, which led him to believe that his appointment was legitimate and he was lawfully discharging his duties.

However, the tribunal ruled that the failure to follow proper legal and procedural steps rendered the salary increase unprocedural, null, and void.

Jul 9, 20254 mins read

Latest News

View more

Top Stories

View more
Why emerging markets will beat developed economies in 2025
business

Why emerging markets will beat developed economies in 2025

Fund managers say developing-nation assets are poised to outpace those in richer markets in the coming months, ending a spell when both moved together after US President Donald Trump began his tariff drive in April.

They base that call on the prospect of easier Federal Reserve policy, investors rotating away from US holdings, stricter budgeting across many emerging economies, and milder inflation that supports growth without overheating prices.

Fidelity International, T. Rowe Price and Ninety One Plc point to these forces as reasons for stronger relative gains in developing markets. They argue that softer inflation, alongside tighter fiscal management, leaves room for interest-rate cuts and bank lending that can spur activity.

Analysts see bigger upside in EM stocks.

Forecasts back the view. Analysts project the MSCI Emerging Markets Index to climb about 15% over the next year, versus roughly 10% for the developed-market benchmark.

As per Bloomberg, flows are lining up with that narrative too, as equity money is moving into EM faster than into developed peers, judging by some of the world’s largest exchange-traded funds.

“EM equities are likely to outperform as they enjoy the tailwinds of easing local monetary policy across most markets, boosting domestic lending and consumption but also a weaker dollar,” said George Efstathopoulos, a fund manager at Fidelity in Singapore. “It’s also important to remember that the Fed as the most significant central bank will most likely be resuming easing in coming quarters.”

Activity since Trump’s “Liberation Day” on April 2 shows the shift.

Around $5.8 billion has gone into the iShares Core MSCI Emerging Markets ETF, the biggest EM tracker, equal to about 5.8% of its assets. The Vanguard FTSE Developed Market ETF drew $5.6 billion over the same period, which is roughly 3.3% of that fund’s holdings.

Rate cut bets strengthen after Fed remarks

A fresh signal from the Fed added momentum on Friday. Chair Jerome Powell indicated the central bank is likely on a path to cut rates in September. After his Jackson Hole remarks covered by Cryptopolitan, traders increased wagers on an easing move at the Sept. 16–17 meeting.

Since April 2, both the MSCI Emerging Markets Index and its developed-market counterpart have advanced about 14%, helped by hopes that Trump’s tariff threats were largely bargaining chips.

Bond markets showed a similar pattern. A Bloomberg index of EM debt returned 4%, while a comparable developed-market gauge gained 3%.

Another advantage for EM assets is policy discipline, said Archie Hart, who oversees emerging-market equities at Ninety One in London.

“If we look at policymakers in emerging markets, they’re conservative, they’re disciplined by the market, they’re pragmatic, so we don’t see these huge unsustainable fiscal deficits that you see in developed markets,” he said.

Valuations also tilt toward the developing world, according to T. Rowe Price. “We have an overweight stance on emerging-market equities in our multi-asset portfolios” as valuations remain more reasonable than those in developed markets, coupled with higher earnings growth prospects, said Thomas Poullaouec, a portfolio manager in Singapore.

Currency markets offer select opportunities

Currencies play a role as well. Poullaouec still sees room in select developing-nation FX, while cautioning on positioning risks.

“Much of the upside in EM currencies has already been priced in, particularly given the crowded US dollar short positioning,” he said. “That said, we maintain positive exposure to Latin American currencies, particularly the Brazilian real, supported by elevated carry and improving fiscal sentiment.”

Local-currency debt is part of the upbeat case. Inflation surprises have cooled sharply in emerging economies.

The Citi Inflation Surprise Index for EM has averaged minus 19 this year, down from peaks above 40 in 2022. A similar gauge for the Group-of-10 economies was minus 12 in July. Negative readings mean inflation came in below forecasts.

Aug 24, 20254 mins read