Last week the Kenyan Minister for Communications Raphael Tuju decided to sack the board of the regulator CCK and sent its Director-General Sammy Kirui on indefinite leave. Meanwhile he has seconded Dr James Kulubi (who is currently responsible for Government ICT policy) to replace Kirui who has been sent on indefinite leave.

The move has full Cabinet backing and is said to relate to investigations into improprieties in the selection of a Second National Operator. Unfortunately no evidence has yet been produced as to what these improprieties are and unless legal action follows, Kirui will have in effect been judged guilty without any formal evidence being presented. The losing bidders for the SNO licence included a group of wealthy diaspora Kenyans based in the USA.

However in the course of this almost surreal dispute, the Government's own dirty laundry has slipped into view. A recent report in the East African Standard makes clear the extent of an international call diversion scandal at Kenya Telkom. On the morning of July 30, 2003, a dissatisfied employee of Data Global Limited tipped the CCK about the illegal operations. Frances Wangusi, the Communications Commission of Kenya director in charge of licensing, compliance and standards reportedly ordered his enforcement officers to confirm the claims. On arrival, they found that the doors on the 11th floor of the Data Global offices on Lonrho House were closed. But they tracked telecommunication wires to the roof of the building where they were connected to an unregistered satellite dish.

The following day, police officers broke into the office with the help of the Lonrho House property manager. They confiscated equipment connected to 80 Telkom lines and several mobile phones. The fact that television cameras were called to cover the dismantling of the illegal international call equipment meant the operation would not lack attention."This is a mini-Telkom Kenya. We estimate that the equipment alone has made over Sh140 million in the past three years," Wangusi told the press, although the figure was later revised upwards.

The following month, the Ministry of Justice and Constitution Affairs requested the CCK to prepare a report on the extent of the illegal international call syndicates in the country. Wangusi and a team of senior CCK managers prepared the dossier which was similar to another that had been submitted to the Kenya Anti-Corruption Commission.

A few days later, it is alleged, the Transport and Communications Minister John Michuki, who has since been moved to the Office of the President as minister for National Security, ordered that Wangusi be sacked. Although CCK did not find anything wrong with the director, it eventually succumbed to pressure and sent him on compulsory leave in October 2003 "in the interest of the Commission". Although no reason was given for the punishment, CCK Director General Sammy Kirui last week said Wangusi was among 12 people asked to "step aside" to facilitate investigations into claims that some CCK officials were accomplices of the syndicate.

Now join the dots up. Minister Michuki seeks to head off the investigation. The operation is a "mini-Telkom Kenya" that cannot have happened without someone in Telkom Kenya's senior management knowing about it at the highest level. And now a second Minister seeks to take away power from CCK. Asked about it, a top politician from western province told the East African Standard: "It is a very unique case". Indeed it is and we note that it has not been investigated with the kind of rigor other cases have been that have been used to satisfy those creating international pressure on the Government to do something about corruption.

According to Joseph Mucheru, Chair of TESPOK:"This action by the Government has thrown the entire industry into disarray. The CCK Board plays such a crucial role that now no further licenses can be issued, no disputes can be settled and no formal regulatory interventions can take place and there is no clear communication from the Government as to how affairs within the sector are to be managed".

If you were of a paranoid turn of mind, you might think that this is just what the Government might want. It means that there is no-one who can order Telkom Kenya to behave in a competitive fashion. The near-bankrupt Telkom Kenya can stagger forward without significant competition. And illegal call diversion within Telkom Kenya may or may not be continuing but there is no way of telling because any investigation has now been halted.

None of this will recommend Kenya to foreign investors and if they are in their right minds any buyer of Telkom Kenya will ask for its due diligence investigation to cover illegal call diversions. After all, no senior executive in a company with US shareholdings will want to lose his job over this one. Remember what happened to those senior Vodacom executives who bought into what was then Econet's mobile subsidiary in Nigeria.

According to William Stucke of The African Internet Service Providers Association (AfrISPA, www.afrispa.org):"We learned with regret the recent state of affairs in the Kenya Communication Sector. We join the Telecommunication Service Providers Association of Kenya (TESPOK, www.tespok.co.ke) to utterly condemn in the most strongest terms the action of the Kenyan Government of suddenly dissolving the Communications Commission of Kenya's Board of Directors and relieving the Director General of his duties – we contend that due process should have being engaged".

"This is a direct subversion of the established legislative and constitutional structure. It is our understanding that the position of Director General has tenure of office under the Communications Act '98 and his removal from active duty without any explanation begs the question as to whether the government really respects the rule of law and upholds due process as demanded by the constitution of the Republic of Kenya. This same law has safeguards to protect the regulator from interference but these seem to have been completely ignored".

"We are of the view that it is totally unacceptable to tamper with State institutions that uphold democratic tenets and the rule of law on our continent. The CCK is providing a beacon of hope in the regional regulatory caucus through the attraction of private capital into the ICT sector through it’s forward looking and level headed regulatory disposition and must not be tampered with this way".

"We are of the view that this has a direct bearing on other sectors like water, electricity etc and can happen anywhere in Africa. Utility regulatory institutions are very important and we must push back actions that treat them this way - this is a major threat to the rule of law and due process. It is also important for us to see this as a major setback for public policy, donors, private sector, regulators, consumers that are not only represented in the IP and Telecom sector but also in the other state Sectors".