I turned around the university fortunes says Egerton VC

Egerton University Vice-Chancellor Prof Rose Mwonya has denied mismanagement claims levelled against the institution’s administration.

In court documents filed at the Nakuru High Court, Prof Mwonya has traced the University’s revival including the nursing of the earlier technically insolvent Egerton University Investment Company Limited (EUICO) to good health as part of the strenuous efforts undertaken by the university administration in the last five years.

In the sworn court documents filed through her lawyer Senior Counsel Otiende Amollo, Prof Mwonya in a suit fighting the University Council’s decision to retire her prematurely cites the transformation to the profitability of EUICO as one of her success stories.

Now in good operating health, the enterprise, she says at full capacity, and utilization should earn the University at least KES 50 million annually in net profit.

Upon taking over in January 2016, rescuing EUICO presented the greatest challenge she says as the university enterprise had incurred multi-year losses and accumulated a crippling debt burden.

The submissions indicate that instead of EUICO being a model enterprise to showcase the University’s agribusiness prowess, the University was at risk of losing the assets to external creditors in an auction.

“Saving the company was, therefore, critical and urgent. The first step was to change the management and tap the head of the Department of Agriculture to lead the revival. Through this effort, EUICO has been turned around, and its risk of liquidation has been eliminated. From the annual loss of KES 60 million in the fiscal year 2015/2016, the company made a profit of KES 3.1 million in the fiscal year 2018/2019. The external debt has been reduced to KES 21 million, and the business units are on course to serve and benefit the University.” Prof Mwonya said.

EUICO the court documents indicate had been incorporated as a wholly-owned University enterprise to generate income for the University in sustainable agribusiness and tourism.

At launch, it was allocated several University assets including the 2728 acres (about ¾ of the University’s agricultural land Ngongogeri Farm, with all its underlying assets including livestock and machinery, the 90-roomed Agricultural Resource Centre (ARC) Hotel and, Lord Egerton Castle and Estate.

For operating capital, the University loaned EUICO KES 145.40 million in working capital support. The company formally started operations in the fiscal year 2012/2013 but operated to near insolvency amounting to an annual loss of KES 60 million by 2016 and an outstanding external debt of over KES 70 million.

“The original University loan of KES 145.4 million also remained unpaid. The enterprise had disclaimer audit opinion reports in both two prior fiscal years, confirming a trajectory to a total collapse. A disclaimer audit opinion is given if the auditor is unable to obtain sufficient audit evidence and the lack of evidence is material and pervasive,” Prof Mwonya indicates and adds, the rescue of EUICO is an important first step. It is a testament to what can be achieved in the University with teamwork, focus, and discipline. The rescue process is being compiled as a case study to be used as a blueprint in diagnosing and rehabilitating similarly stalled agriculture enterprises across the country.”

Before sending out a show-cause letter to Prof Mwonya dated 13th November 2020, the university council chairman Amb, Dr Hukka Wario, had notified Cabinet Secretary Magoha of the Council’s recommendation to reappoint her as the Vice-Chancellor for a second term.

“I unreservedly recommend Professor Rose A. Mwonya for renewal of service as Vice-Chancellor Egerton University, for the second and final five-year term,” wrote Amb. Dr Wario to Prof Magoha in a letter dated 10th August 2020.

  

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