Court Strikes Out Union Bid to Remove KPC Chair Over Conflict-of-Interest Claims
Key Highlights
- The High Court has struck out a petition by the Kenya Petroleum Oil Workers Union seeking to remove Faith Bett Boinett as Kenya Pipeline Company chair, ruling that it lacked jurisdiction.
- The union alleged a conflict of interest because Boinett is a director of Fastnett Energy, which has held transport and storage contracts with the pipeline operator since 2018.
- Because the case ended on jurisdiction, the conflict claim was never tested on its merits, and it is not yet clear whether the union will pursue it in another forum.
Faith Bett Boinett keeps her seat as chair of Kenya Pipeline Company (KPC) after the High Court threw out a union petition that accused her of a conflict of interest, without ever hearing the claim.
The court ruled that it lacked jurisdiction over the dispute, Business Daily reported on 12 October. The Kenya Petroleum Oil Workers Union had argued that President William Ruto's appointment of Boinett created a conflict of interest. Because the case ended on a point of jurisdiction, the claim was never tested on its merits. The board of a company that raised about KSh 106 billion ($817 million) from investors this year keeps its chair for now.
The union's case against the KPC chair
The union filed its petition in July. It said Boinett is a shareholder and director of Fastnett Energy, a company that has held transport and storage agreements with KPC since 2018 and had them renewed several times. It asked the court to quash her appointment, bar KPC from dealing with Fastnett, and stop her from serving on the board.
It also went after the board itself. The union argued that after the National Treasury revoked KPC's status as a National Government Entity on 22 April, the board could act only as a caretaker and had no legal mandate to make major decisions. It pointed to the recruitment of a new managing director and a plan to downgrade the staff medical scheme as examples of overreach.
None of those claims has been decided. They are the union's allegations, and the ruling on jurisdiction leaves them untested.
Why investors and staff are watching
KPC is no longer a typical state parastatal. It became a public limited company in January and listed on the Nairobi Securities Exchange in March. The government's stake has fallen to 35 per cent, while the Uganda National Oil Company holds 20.15 per cent, a stake worth more than KSh 32 billion ($247 million).
That ownership mix turns a boardroom fight into a market question. Shareholders who bought into the listing expect decisions on contracts, pipeline projects and executive hires to hold up against legal challenge. A dispute over who may sit on the board, or whether it has the authority to act, can slow all three.
The wider worry is how boards at partly state-owned companies are appointed and policed. As Mwenendo earlier reported, state firms owe KSh 62 billion in borrowing without a government guarantee, which shows how much public money can ride on how these companies are run.
The next legal test for the KPC board
The next move belongs to the union. It could appeal, refile before a court with the right jurisdiction, or let the matter rest, and the conflict-of-interest question stays open whichever it chooses.
Investors will also watch the Capital Markets Authority, the listing regulator and a respondent in the petition. It is already busy with its Dangote share offer review. Until a competent forum rules on the merits, the allegations stay allegations, and the board keeps operating under a cloud.