Nairobi — The State Corporations Appeal Tribunal has sustained a finding declaring a Sh27.6 million pay rise awarded to Music Copyright Society of Kenya (MCSK) Chief Executive Officer Ezekiel Mutua as irregular and unlawful.
The tribunal affirmed the finding while upholding a surcharge of Sh2.8 million against a former board member involved in approving the increment.
In its final ruling delivered in Appeal No. SCAT 003 of 2024 on Thursday, the Tribunal dismissed an appeal by Nehemiah Kipkoech, a former board member of the Kenya Film Classification Board (KFCB), challenging a 2024 surcharge order issued by the Inspector General (Corporations) over the controversial salary hike.
The Tribunal found that the Board’s decision to raise Mutua’s monthly salary from Sh348,840 to Sh1,115,850–without prior approval from the Salaries and Remuneration Commission (SRC) or the relevant Cabinet Secretary–was in breach of the Constitution and governing statutes.
“Failure to seek the SRC’s input and the Cabinet Secretary’s final approval rendered the increment unprocedural, null and void,” the Tribunal ruled, adding that the increment “violated Article 230 of the Constitution.”
Despite a directive by the Cabinet Secretary on April 30, 2019, advising the Board not to implement the salary increment and to recover any amounts already paid, the Board proceeded with the new pay structure, leading to a Sh27.6 million loss of public funds.
Fair administrative action
The Tribunal upheld the Certificate of Surcharge No. SUR/006/2024, which required Kipkoech to personally refund Sh2,761,236, noting that as a board member, he participated in a decision that contravened mandatory legal procedures.
While the appellant argued that he was denied fair administrative action and not given a proper hearing before the surcharge, the Tribunal found that he was issued an invitation to explain himself in 2020 but failed to respond.
It also noted that he was eventually given written reasons for the surcharge upon request.
On the question of whether statutory deductions had been considered in computing the surcharge, the Tribunal said it lacked evidence to confirm or adjust the amount and advised the appellant to pursue that matter with relevant tax authorities.
The Tribunal concluded that the surcharge was lawful, the amount justifiable, and the administrative process followed was within legal bounds.
“The appeal is hereby dismissed. The Certificate of Surcharge for the sum of Sh2,761,236 is upheld and confirmed,” the Tribunal ordered.
The Tribunal ordered parties to bear their own legal costs.
