Kenya Act or statute

Parliament of Kenya

State Corporations Act

Jurisdiction: Kenya
Structure: 30 provisions
Citation: Cap. 446
Dates: As at 15 Sept 2023

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Dates: As at 15 Sept 2023

Source attribution: Source: Kenya Law

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“The President may, by order, establish a state corporation as a body corporate; such a state corporation has perpetual succession, can sue and be sued, and (subject to the Act) can hold and alienate movable and immovable property.”

The President may, by order, establish a state corporation as a body corporate; such a state corporation has perpetual succession, can sue and be sued, and (subject to the Act) can hold and alienate movable and immovable property. The President must assign ministerial responsibility for any state corporation and related matters to the Vice‑President and the several Cabinet Secretary. The President may, by notice in the Gazette, exempt a state corporation (except one established under section 3) from provisions of this Act, but such an exemption cannot apply to the listed sections. State corporations have necessary powers to perform their functions; borrowing requires Cabinet Secretary consent and Treasury limits; corporations may employ staff and establish employee funds with specified approvals. Every state corporation must have its financial year run from 1 July to 30 June of the next year.

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ESTABLISHMENT AND POWERS OF STATE CORPORATIONS - 3. Establishment of state corporations by the President

Section 3

BOARDS AND MANAGEMENT OF STATE CORPORATIONS - 7. Power to issue directions and to removeBoard

The President may give directions to a state corporation's Board, which the Board must implement; the President may require amendments to founding documents to conform with the Act and may remove and replace Board members or constitute a new Board if the Board…

Section 7

CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 16. Renewal of depreciating assets,etc. and disposal of surplus funds

State corporations must establish sinking funds and make contributions to reserve and stabilization funds for renewal of depreciating assets; the Cabinet Secretary may direct disposal of surplus moneys in writing and the Cabinet Secretary for finance may…

Section 16

CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 23. Appeals to the High Court

Certain persons may appeal Tribunal decisions to the High Court within thirty days; the High Court may confirm, vary or annul those decisions; civil-appeal procedures apply to such appeals; the High Court's decision under this section is final.

Section 23

MISCELLANEOUS PROVISIONS - 30. Regulations

The President may make regulations to better carry the provisions of this Act into effect.

Section 30

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Showing 30 of 30 provisions

Provision 23Offence 3Commencement 2Repeal

Part II

ESTABLISHMENT AND POWERS OF STATE CORPORATIONS

§ 3ESTABLISHMENT AND POWERS OF STATE CORPORATIONS - 3. Establishment of state corporations by the PresidentProvision

Section 3. Establishment of state corporations by the President Section 3(1) The President may, by order, establish a state corporation as a body corporate to perform the functions specified in that order. Section 3(2)(a) have perpetual succession; Section 3(2)(b) in its corporate name be capable of suing and being sued; Section 3(2)(c) subject to this Act, be capable of holding and alienating movable and immovable property.

Section 3Verify source

§ 4ESTABLISHMENT AND POWERS OF STATE CORPORATIONS - 4. Ministerial responsibility for state corporationsProvision

The President must assign ministerial responsibility for any state corporation and related matters to the Vice‑President and the several Cabinet Secretary.

Section 4. Ministerial responsibility for state corporations Section The President shall assign ministerial responsibility for any state corporation and matters relating thereto to the Vice-President and the several Cabinet Secretary as the President may by directions in writing determine.

Section 4Verify source

§ 5ESTABLISHMENT AND POWERS OF STATE CORPORATIONS - 5. Powers generally of state corporationsCommencement

State corporations have necessary powers to perform their functions; borrowing requires Cabinet Secretary consent and Treasury limits; corporations may employ staff and establish employee funds with specified approvals.

Section 5. Powers generally of state corporations Section 5(1) Subject to this Act, every state corporation shall have all the powers necessary or expedient for the performance of its functions. Section 5(2) After the commencement of this Act and notwithstanding subsection (1), the power of a state corporation to borrow money in Kenya or elsewhere shall be exercised only with the consent of the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") and subject to such limitations and conditions as may be imposed by the Treasury with respect to state corporations generally or specifically with respect to a particular state corporation . Section 5(3) A state corporation may engage and employ such number of staff, including the chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") on such terms and conditions of service as the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") may, in consultation with the Commititee, approve. Section 5(4) A state corporation may, with the approval of the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") in consultation with the Treasury and the Committee ("the State Corporations Advisory Committee established by;") , establish pension, gratuity, superannuation, provident or other funds for the state corporation 's employees and their dependants.

Section 5Verify source

§ 5AESTABLISHMENT AND POWERS OF STATE CORPORATIONS - 5A. ExemptionRepeal

The President may, by notice in the Gazette, exempt a state corporation (except one established under section 3) from provisions of this Act, but such an exemption cannot apply to the listed sections.

Section 5A. Exemption Section 5A(1) Subject to subsection (2), the President may, by notice in the Gazette , exempt a state corporation , not being a state corporation established under section 3 , from any of the provisions of this Act. Section 5A(2) Notwithstanding the provisions of subsection (1), an exemption granted under this section shall not exempt a state corporation from the provisions of sections 5 , 10A , 11 , 13 , 14 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , or 29 . Section 5A(3)(a) the provisions of the written law under which such state corporation is established; or Section 5A(3)(b) a declaration in that behalf under paragraph (b)(vii) of section 2 (now repealed),

Section 5AVerify source

Part III

BOARDS AND MANAGEMENT OF STATE CORPORATIONS

§ 10BOARDS AND MANAGEMENT OF STATE CORPORATIONS - 10. Remuneration and expenses of Chairperson and membersProvision

Chairperson and members of a Board are entitled to be paid sitting allowances or other remuneration from the state corporation's funds; the Board may approve such remuneration within scales set by the Committee, and the Board may refund travelling and other expenses incurred by chairperson or members within those scales.

Section 10. Remuneration and expenses of Chairperson and members Section 10(1) The Chairperson and members of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") , other than the chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") , shall be paid out of the funds of the state corporation such sitting allowances or other remuneration as the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") may, within the scales of remuneration specified from time to time by the Committee ("the State Corporations Advisory Committee established by;") , approve. Section 10(2) A Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") may, within the scales specified by the Committee ("the State Corporations Advisory Committee established by;") , refund travelling and other expenses incurred by the chairperson or members of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") in the performance of their duties. [Act No. 2 of 2002 , Sch.]

Section 10Verify source

§ 10ABOARDS AND MANAGEMENT OF STATE CORPORATIONS - 10A. Financial yearProvision

Every state corporation must have its financial year run from 1 July to 30 June of the next year.

Section 10A. Financial year Section Notwithstanding anything to the contrary in any written law, the financial year of every state corporation shall be from the 1st of July in a year to the 30th of June in the next year. [Act No. 12 of 2003 , 3rd Sch.]

Section 10AVerify source

§ 6BOARDS AND MANAGEMENT OF STATE CORPORATIONS - 6. Composition of BoardsOffence

Section 6 sets out the composition of state corporation boards, lists categories of members (Chairperson appointed by the President; the chief executive; Principal Secretaries; the Attorney-General or representative; and up to eleven other members appointed by the Cabinet Secretary), describes grounds on which membership may cease (resignation, absence, conviction with prescribed imprisonment or fine, incapacity, or conduct inconsistent with membership as determined by the Cabinet Secretary in consultation with the Committee), disqualifies certain former members from reappointment, and allows the Cabinet Secretary, in consultation with the Committee, to appoint alternate members who may attend and act in place of substantive members.

Section 6. Composition of Boards Section 6(1)(a) a Chairperson appointed by the President who shall be non-executive unless the President otherwise directs; Section 6(1)(b) the chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") ; Section 6(1)(c) the Principal Secretary of the parent Ministry; Section 6(1)(d) the Principal Secretary to the National Treasury; Section 6(1)(da) the Attorney-General or his representative; Section 6(1)(e) not more than eleven other members not being employees of the state corporation , of whom not more than three shall be public officers, appointed by the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") . Section 6(2)(a) serves the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") with written notice of resignation; or Section 6(2)(b) is absent, without the permission of the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") notified to the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") , from three consecutive meetings; or Section 6(2)(c) is convicted of an offence and sentenced to imprisonment for a term exceeding six months or to a fine exceeding two thousand shillings; or Section 6(2)(d) is incapacitated by prolonged physical or mental illness from performing his duties as a member of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") ; or Section 6(2)(e) conducts himself in a manner deemed by the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") , in consultation with the Committee ("the State Corporations Advisory Committee established by;") , to be inconsistent with membership of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") . Section 6(3) No person whose membership of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") has ceased in aocordance with paragraphs (b), (c) or (e) of subsection (2) shall be eligible for appointment to any Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") thereafter. Section 6(4) Unless the written law under which a state corporation is established or the articles of association of a state corporation otherwise require, the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") may, in consultation with the Committee ("the State Corporations Advisory Committee established by;") , appoint one or more duly qualified persons, not being members of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") , to be alternate members, and any one alternate member may attend a meeting of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") in place of a substantive member who is unable to attend; and every alternate member shall, when attending a meeting, be deemed for all purposes to be a member of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") . [Act No. 11 of 1992 , Sch., Act No. 25 of 2015 , Sch.]

Section 6Verify source

§ 7BOARDS AND MANAGEMENT OF STATE CORPORATIONS - 7. Power to issue directions and to removeBoardAmendment

Section 7. Power to issue directions and to removeBoard Section 7(1) The President may give directions of a general or specific nature to a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") with regard to the better exercise and performance of the functions of the state corporation and the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall give effect to those directions. Section 7(2) Notwithstanding subsection (1), directions under this section may require that the memorandum and articles or any other documents establishing a state corporation , be amended to conform with any requirement of this Act where the same is inconsistent therewith. Section 7(3) Notwithstanding the provisions of any other written law or the articles of association establishing and governing a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") the President may, if at any time it appears to him that a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") has failed to carry out its functions in the national interest, revoke the appointment of any member of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") and may himself nominate a new member for the remainder of the period of office of that member or he may constitute a new Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") for such period as he shall, in consultation with the Committee ("the State Corporations Advisory Committee established by;") , determine. [Act No. 2 of 2002 , Sch.]

Section 7Verify source

§ 8BOARDS AND MANAGEMENT OF STATE CORPORATIONS - 8. Meetings and procedure of BoardsProvision

Rules for Board meetings: the Board must meet at least four times a year with no more than four months between meetings; Board decides meeting dates or the Chairperson (with the chief executive) may set them; meetings must be at the registered office unless the Committee gives prior written approval; 14 days' written notice is required unless three-quarters agree; quorum is two-thirds (with adjournment and deeming rules); Chairperson presides; decisions by majority with casting vote; members with interests must declare and retire and not vote; chief executive may require his dissent be recorded.

Section 8. Meetings and procedure of Boards Section 8(1)(a) the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") of every state corporation shall meet not less than four times in every financial year and not more than four months shall elapse between the date of one meeting and the date of the next meeting; Section 8(1)(b) a meeting of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall be held on such date and at such time as the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall decide or, in the absence of such decision or on any occasion on which the Chairperson in consultation with the chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") shall decide that a meeting is necessary, on a date and at a time determined by the Chairperson; Section 8(1)(c) no meeting of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall be held at any place other than the registered or principal office of the state corporation except with the prior written approval of the Committee ("the State Corporations Advisory Committee established by;") ; Section 8(1)(d) unless three-quarters of the total membership of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") otherwise agree, at least fourteen days' written notice of every meeting of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall be given to every member of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") ; Section 8(1)(e) the quorum for the conduct of business at a meeting of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall be two-thirds of the total number of members of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") or the number nearest to but not less than two-thirds; Provided that where within half an hour after the time appointed for the meeting a quorum is not present, the meeting shall be adjourned to the same day in the next week, at the same time and place, or at such time as the members may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the members present shall be deemed to be a quorum; Section 8(1)(f) the Chairperson of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall preside at all meetings of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") but in the absence of the Chairperson the members present shall appoint one of their number to preside at the meeting; Section 8(1)(g) unless a unanimous decision is reached, a decision on any matter before a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall be by a majority of votes of the members present and in the case of an equality of votes, the Chairperson or the person presiding shall have a casting vote; Section 8(1)(h) every member of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") who is likely to be interested, otherwise than as a member of that Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") or who participates or is or may become entided to participate directly or indirectly, in the profits from any contract or proposed contract or work done or proposed to be done for the state corporation , shall, on the matter coming before a meeting of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") for consideration, immediately declare his interest therein and shall, unless the meeting otherwise agrees, retire from the meeting and shall in any case not be entitled to vote on the matter. Section 8(2) The chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") of a state corporation or an officer instructed by the chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") in that behalf, present at a meeting of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") or a committee thereof, shall have the right to require his opinion to be recorded in the minutes if the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") or the committee, as the case may be, passes a resolution, which in the chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") 's or officer's opinion, is contrary to his advice or contrary to law. [Act No. 2 of 2002 , Sch.]

Section 8Verify source

§ 9BOARDS AND MANAGEMENT OF STATE CORPORATIONS - 9. CommitteesCommencement

A state corporation may establish committees of Board members to deal with matters the Board specifies.

Section 9. Committees Section A state corporation may establish committees consisting of members of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") to deal with such matters as the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") may specify and notice of establishment of any committee in accordance with this section whether established before or after the commencement of this Act shall be served on the State Corporations Advisory Committee ("the State Corporations Advisory Committee established by;") .

Section 9Verify source

Part IV

CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS

§ 11CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 11. Annual estimatesProvision

Every state corporation must prepare and, by the end of February each year, submit to the Cabinet Secretary and the Treasury for approval estimates of revenue and expenditure for the next financial year together with proposals to fund projects.

Section 11. Annual estimates Section 11(1) Every state corporation shall cause to be prepared and shall, not later than the end of February in every year, submit to the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") and to the Treasury for approval, estimates of the state corporation 's revenue and expenditure for the following financial year accompanied by proposals for funding all projects to be undertaken by the state corporation , or the implementation of which will continue during the financial year to which those estimates relate. Section 11(2) No annual estimates and proposals for funding projects shall be implemented until they have been approved by the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") with the concurrence of the Treasury.

Section 11Verify source

§ 12CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 12. Expenditure not included in annual estimatesProvision

State corporations must not incur any expenditure not provided for in the annual estimates unless they have prior written approval from the Cabinet Secretary and the Treasury.

Section 12. Expenditure not included in annual estimates Section No state corporation shall, without the prior approval in writing of the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") and the Treasury, incur any expenditure for which provision has not been made in an annual estimate prepared and approved in accordance with section 11 .

Section 12Verify source

§ 13CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 13. Dealing with assetsProvision

Section 13 sets conditions under which state corporations may deal with assets and empowers the Cabinet Secretary responsible for finance, in consultation with the Committee, to make rules for acquisition and disposal of assets; it also exempts procurements or disposals subject to the Public Procurement and Asset Disposal Act.

Section 13. Dealing with assets Section 13(1)(a) if they are current assets in the normal course of business carried on by that state corporation ; Section 13(1)(b) where the disposal and the utilization of the proceeds have been taken into account in an annual estimate prepared and approved in accordance with section 11 ; Section 13(1)(c) by way of sale or otherwise with the approva! of the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") and the Treasury where such disposal has not been taken into account in the estimates. Section 13(2) Subject to subsection (1), the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") for the time being responsible for finance may, in consultation with the Committee ("the State Corporations Advisory Committee established by;") , make rules for the acquisition and disposal of assets by state corporations and different rules may be made with respect to different state corporations; and such rules shall be brought to the notice of the state corporations and other persons affected thereby, but it shall not be necessary to publish the rules in the Gazette . Section 13(3) This section does not apply with respect to procurements or disposals to which the Public Procurement and Asset Disposal Act ( Cap. 412C ) applies. [Act No. 3 of 2005 , 4th Sch.]

Section 13Verify source

§ 14CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 14. Books of accounts, records and auditsProvision

State corporations must keep proper books recording their property, undertakings, funds, activities, contracts, transactions and other business; the Cabinet Secretary responsible for finance may prescribe the form of such books.

Section 14. Books of accounts, records and audits Section 14(1) Every state corporation shall keep or cause to be kept proper books recording all the property, undertakings, funds, activities, contracts, transactions and other business of the state corporation . Section 14(2) The Cabinet Secretary for the time being responsible for finance may prescribe the form of any book required to be kept under subsection (1) and unless a form has been prescribed, a form suitable for the purpose shall be used. Section 14(3) The accounts of every state corporation shall be audited and reported on annually in accordance with the Public Audit Act ( Cap. 412B ). Section 14(4) Deleted by ActNo. 12 of 2003, 3rd Sch. [Act No. 2 of 2002 , Sch., Act No. 12 of 2003 , 3rd Sch.]

Section 14Verify source

§ 15CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 15. AccountabilityProvision

The Board is responsible for the proper management of a state corporation and accountable for its moneys, financial business and management; the chief executive may be summoned by the Public Investments Committee to answer on behalf of the Board about Auditor-General reports.

Section 15. Accountability Section 15(1) A Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") shall be responsible for the proper management of the affairs of a state corporation and shall be accountable for the moneys, the financial business and the management of a state corporation . Section 15(2) The chief executive ("the person appointed and employed as such under(3) or the person for the time being exercising the executive powers of a state corporation;") of a state corporation may be summoned by the Public Investments Committee ("the State Corporations Advisory Committee established by;") to answer on behalf of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") any question arising from a report, including a special report, of the Auditor-General concerning the state corporation [Act No. 2 of 2002 , Sch., Act No. 12 of 2003 , 3rd Sch.]

Section 15Verify source

§ 16CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 16. Renewal of depreciating assets,etc. and disposal of surplus fundsProvision

Section 16. Renewal of depreciating assets,etc. and disposal of surplus funds Section 16(1) Every state corporation shall make provision for the renewal of depreciating assets by the establishment of sinking funds and for contributions to suoh reserve and stabilization funds as may be required. Section 16(2) Where there are any surplus moneys after making the provision required by subsection (1) the surplus moneys shall be disposed of in such manner as the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") , in consultation with the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") , may, in writing, direct. Section 16(3) Notwithstanding subsection (2), the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") for the time being responsible for finance may require the whole or any part of the surplus moneys to be paid into the Consolidated Fund where the exigencies of the financial situation so require.

Section 16Verify source

§ 17CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 17. Restriction on loans toBoardmembers and staffProvision

State corporations must not grant loans, advances or arrange credit facilities for Board members or staff except under regulations made by the corporation and approved by the Treasury; if those regulations are absent, such loans may be granted under terms approved by the Committee.

Section 17. Restriction on loans toBoardmembers and staff Section Notwithstanding any other written law establishing a state corporation or its memorandum and articles of association no state corporation shall grant to a member of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") or staff any loan or advance or arrange any credit facility for him except in accordance with regulations made by the state corporation under this section and approved by the Treasury, but in the absence of those regulations such loan, advance or credit facility may be granted in accordance with terms and conditions approved by the Committee ("the State Corporations Advisory Committee established by;") .

Section 17Verify source

§ 18CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 18.Inspector-General (Corporations)Provision

Section 18 assigns the Inspector-General (Corporations) functions to advise the Government, report to the Cabinet Secretary and Auditor-General, inspect records and premises of state corporations, attend meetings when necessary, conduct special investigations if required by the Committee or Controller and Auditor-General, and appoint necessary public-service staff to assist.

Section 18.Inspector-General (Corporations) Section 18(1)(a) to advise the Government on all matters affecting the effective running of state corporations; Section 18(1)(b) to report periodically to the Cabinet Secretary ("the Cabinet Secretary for the time being assigned ministerial responsibility for a state corporation and matters relating thereto by the President underand "parent Ministry" shall be construed accordingly;") on management practices within any state corporation ; Section 18(1)(c) to report to the Auditor-General and any cases where moneys appropriated by Parliament are not being applied by state corporations for the purposes for which they were appropriated. Section 18(2)(a) to call for and inspect all books, records, returns and documents which in his opinion relate to the accounts of, or to execution of the functions of, any state corporation ; Section 18(2)(b) to enter and inspect the premises, including any plant and installaltion thereon, of any state corporation ; Section 18(2)(c) to attend meetings of any state corporation or of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") or committee thereof if in his opinion it is necessary to do so for the effective carrying out of his duties under this section. Section 18(3) The Committee ("the State Corporations Advisory Committee established by;") , or the Controller and Auditor-General may, if they consider it desirable, require the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) to conduct special investigations of any state corporation on their behalf and to report the findings to them. Section 18(4) There may be appointed such staff whose offices shall be offices in the public service as are necessary to assist the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) in the performance of his duties under this Act. [Act No. 2 of 2002 , Sch.]

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§ 19CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 19. Powers ofInspector-General (Corporations) after investigationsProvision

The Inspector-General (Corporations) may disallow items of account contrary to law or lawful directions, surcharge responsible persons for disallowed expenditure, unpaid sums, losses or deficiencies, certify surcharge amounts, and must furnish a person surcharged with a prescribed certificate as soon as practicable after certifying the surcharge. A person is not freed from liability to surcharge merely because they acted pursuant to a board resolution that was contrary to law.

Section 19. Powers ofInspector-General (Corporations) after investigations Section 19(1)(a) to disallow any item of account which is contrary to the law or to any direction lawfully given to a state corporation ; Section 19(1)(b) to surcharge the amount of any expenditure so disallowed upon the person responsible for incurnng or authorizing the expenditure; Section 19(1)(c) to surcharge any sum which has not been duly brought to account upon the person by whom that sum ought to have been brought into account; Section 19(1)(d) to surcharge the amount of any loss or deficiency upon any person by whose negligence or misconduct the loss or deficiency has been incurred; Section 19(1)(e) to certify the amount due from any person upon whom he has made a surcharge. Section 19(2) The Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) shall, as soon as practicable after certifying the amount of surcharge; furnish the person surcharged with a certificate of surcharge in the prescribed form. Section 19(3)(a) he voted in favour of it; or Section 19(3)(b) he did not cause his vote against the resolution to be recorded in the minutes. Section 19(4) A person shall not be freed from liability to surcharge under this section by reason only of the fact that, in the matter giving rise to the liability, he acted in pursuance of any resolution of a Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") , or of any committee thereof, if that resolution was contrary to law. [Act No. 2 of 2002 , Sch.]

Section 19Verify source

§ 20CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 20. Application for written reasons forInspector-General (Corporations) decisionProvision

The Inspector-General (Corporations) must, on application by an aggrieved person, furnish that person with written reasons for a disallowance or surcharge made under section 19 within fourteen days of the application.

Section 20. Application for written reasons forInspector-General (Corporations) decision Section The Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) shall, on the application of any person aggrieved by a disallowance or surcharge made under section 19 , within fourteen days of the application furnish the person with reasons in writing for the decision. [Act No. 2 of 2002 , Sch.]

Section 20Verify source

§ 21CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 21. Appeals against decision ofInspector-General (Corporations)Provision

Any person aggrieved by a disallowance or surcharge may appeal to the State Corporations Appeal Tribunal within thirty days by written memorandum; the Tribunal has power on appeal to confirm, vary or quash the Inspector-General's decision and to remit the case with directions.

Section 21. Appeals against decision ofInspector-General (Corporations) Section 21(1) Any person who is aggrieved by a disallowance or surcharge, may, within thirty days of the date of the certificate of surcharge, appeal by written memorandum to the Tribunal ("the State Corporations Appeal Tribunal established by") . Section 21(2) The Tribunal ("the State Corporations Appeal Tribunal established by") shall, on appeal, have power to confirm, vary or quash the decision of the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations), and to remit the case to the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) with such directions as the Tribunal ("the State Corporations Appeal Tribunal established by") thinks fit for giving effect to the decision on appeal. [Act No. 2 of 2002 , Sch.]

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§ 22CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 22. The State Corporations AppealTribunalOffence

Establishes the State Corporations Appeal Tribunal, its membership and appointments, provides that the Cabinet Secretary for finance must fund it, grants procedural powers (including summoning and regulating procedures), permits the secretary to administer oaths, and creates an offence for failing to attend a summons with a fine or imprisonment.

Section 22. The State Corporations AppealTribunal Section 22(1) There shall be a Tribunal ("the State Corporations Appeal Tribunal established by") , to be known as the State Corporations Appeal Tribunal ("the State Corporations Appeal Tribunal established by") , which shall consider and determine appeals under section 21 . Section 22(2) The Cabinet Secretary for the time being responsible for finance shall provide the Tribunal ("the State Corporations Appeal Tribunal established by") with such facilities, material and funds as are necessary for the proper conduct of its functions. Section 22(3)(a) a Chairperson who shall be a person qualified by law to be appointed a judge, appointed by the President; Section 22(3)(b) the Council of the Law Society of Kenya from amongst advocates of not less than seven years' standing; and Section 22(3)(b)(i) the Council of the Law Society of Kenya from amongst advocates of not less than seven years' standing; and Section 22(3)(b)(ii) the Council of the Institute of Certified Public Accountants of Kenya from amongst accountants of not less than seven years' standing. Section 22(4) The Attorney-General shall appoint a public officer to be secretary to the Tribunal ("the State Corporations Appeal Tribunal established by") . Section 22(5) There may be appointed such staff of the Tribunal ("the State Corporations Appeal Tribunal established by") whose offices shall be offices in the public service, as may be necessary. Section 22(6) For the purposes of the hearing and determination of any appeal by the Tribunal ("the State Corporations Appeal Tribunal established by") the secretary may, under the direction of the Tribunal ("the State Corporations Appeal Tribunal established by") , administer oaths. Section 22(7) The Chairperson, may by notice under his hand, summon any person to attend and give evidence and to produce any relevant book or document; and a person who fails to attend when so summoned shall be guilty of an offence and liable to a fine of two thousand shillings or imprisonment for one month. Section 22(8)(i) an order for the deposit by an appellant of money as security for costs before proceeding upon an appeal; and Section 22(8)(ii) an order that the expenses incurred by an appellant or any other party to the proceedings shall be paid by the state corporation concerned in the proceedings; and Section 22(8)(iii) orders as to taxation of costs in accordance with any scale prescribed for suits in the High Court. Section 22(9) Any costs not recovered from security ordered under paragraph (a) (i) of subsection (8) shall be recoverable as a civil debt. Section 22(10) A person shall not be qualified to be appointed the Chairperson or a member of the Tribunal ("the State Corporations Appeal Tribunal established by") if he is an employee of, or a member of the Board ("the Board constituted in accordance with(1) or the body or person, by whatever name called, carrying out or empowered to carry out functions relating to the overall direction and management of a state corporation;") of, a state corporation . Section 22(11) Every appointment under this section other than an appointment under subsection (5) shall be by name and by notice in the Gazette and shall be for a renewable term of not less than five years with respect to the Chairperson and not more than three years with respect to the members. Section 22(12) The sessions of the Tribunal ("the State Corporations Appeal Tribunal established by") shall, unless the special circumstances of an appeal require, be in Nairobi, convened by the Chairperson as occasion requires. Section 22(13) The record of the proceedings and of every decision of the Tribunal ("the State Corporations Appeal Tribunal established by") shall be authenticated by the signature of the Chairperson and shall be kept by the secretary. Section 22(14) The Chairperson and members of the Tribunal ("the State Corporations Appeal Tribunal established by") , other than public officers in receipt of a salary, shall be paid out of public funds such sitting allowances or other remuneration as the Committee ("the State Corporations Advisory Committee established by;") may, in consultation with the Treasury, approve. Section 22(15) Subject to this section, the Tribunal ("the State Corporations Appeal Tribunal established by") may, with the approval of the Chief Justice, regulate its own procedures and the conduct of proceedings before it.

Section 22Verify source

§ 23CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 23. Appeals to the High CourtProvision

Section 23. Appeals to the High Court Section 23(1) The Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) or the person surcharged may, if aggrieved by the decision of the Tribunal ("the State Corporations Appeal Tribunal established by") , within thirty days appeal to the High Court which shall have power to confirm, vary or annul the decision of the Tribunal ("the State Corporations Appeal Tribunal established by") . Section 23(2) The procedure in and relating to appeals in civil matters from subordinate courts to the High Court and the powers of the High Court in such appeals shall govern appeals from the Tribunal ("the State Corporations Appeal Tribunal established by") to the High Court under this Act. Section 23(3) The decision of the High Court under this section shall be final and shall not be subject to further appeal. [Act No. 2 of 2002 , Sch.]

Section 23Verify source

§ 24CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 24. Payment and recovery of sums certified to be trueProvision

A person must pay any sum certified by the Inspector-General (Corporations) to be due to the state corporation within 30 days, or within 14 days after an appeal is disallowed/abandoned/failed; the Inspector-General may pursue unpaid sums in court, and on production of the Inspector-General's certificate the Court must give a decree which has effect under the Civil Procedure Act.

Section 24. Payment and recovery of sums certified to be true Section 24(1) Every sum certified by the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) to be due from a person shall be paid by that person to the state corporation within thirty days after it has been so certified or, if an appeal with respect to the sum has been made, within fourteen days after the appeal has been disallowed, abandoned or has failed by reason of the non-prosecution thereof. Section 24(2) The Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) shall take all necessary steps in any competent court to recover from the persons surcharged any sum which is not paid in accordance with subsection (1). Section 24(3) In any proceedings for the recovery of any sum which is not paid in accordance with subsection (1) the certificate of the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) shall be conclusive evidence that the sum is due and payable by the person surcharged. Section 24(4) On the production of the certificate of the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) the Court shall give a decree for the sum sued for and the decree shall have the effect of a decree under the Civil Procedure Act ( Cap. 21 ) and any rules made thereunder. [Act No. 2 of 2002 , Sch.]

Section 24Verify source

§ 25CONTROL OF THE FINANCES,ETC. OF STATE CORPORATIONS - 25. Expenses of theInspector-General (Corporations)Provision

State corporations that are the subject of investigation must reimburse or bear the Inspector-General (Corporations)'s legal expenses in specified circumstances.

Section 25. Expenses of theInspector-General (Corporations) Section 25(1) Any expenses incurred by the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) in the defence of any allowance, disallowance or surcharge shall, so far as not recovered from any other party and except as may otherwise be ordered by the High Court or the Tribunal ("the State Corporations Appeal Tribunal established by") , be reimbursed to him by the state corporation the subject of investigation. Section 25(2) The costs and expenses incurred by the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations) in any legal proceedings taken under section 24 (2) shall, if not recovered from any other source, be borne by the state corporation the subject of investigation. [Act No. 2 of 2002 , Sch.]

Section 25Verify source

Part V

THE STATE CORPORATIONS ADVISORY COMMITTEE

§ 26THE STATE CORPORATIONS ADVISORY COMMITTEE - 26. Establishment ofCommitteeProvision

Section 26 establishes the State Corporations Advisory Committee, lists its membership, allows the Committee to co-opt persons, requires the President to appoint a public officer as secretary, requires the Committee to determine its procedure subject to the President's directions, and provides that members and the secretary shall be paid out of public funds as approved by the President.

Section 26. Establishment ofCommittee Section 26(1)(a) a Chairperson appointed by the President; Section 26(1)(b) the Principal Secretary to the National Treasury; Section 26(1)(c) the Director of Personnel Management; Section 26(1)(d) the Inspector ("the Inspector-General (Corporations) appointed as such under;") -General (Corporations); Section 26(1)(e) eight other members appointed by the President. Section 26(2) The Committee ("the State Corporations Advisory Committee established by;") may co-opt any person for such purpose and for such period as it may determine. Section 26(3) The President shall appoint a public officer to be secretary to the Committee ("the State Corporations Advisory Committee established by;") . Section 26(4) Subject to directions by the President, the Committee ("the State Corporations Advisory Committee established by;") shall determine its own procedure. Section 26(5) The members and the secretary of the Committee ("the State Corporations Advisory Committee established by;") shall be paid out of public funds such remuneration and in such manner as the President may approve. [Act No. 18 of 1986 , Sch., Act No. 13 of 1988 , Sch., Act No. 2 of 2002 , Sch., Act No. 25 of 2015 , Sch.]

Section 26Verify source

§ 27THE STATE CORPORATIONS ADVISORY COMMITTEE - 27. Functions of theCommitteeProvision

The Committee must, with assistance of experts where necessary, review and investigate the affairs of state corporations and make recommendations to the President.

Section 27. Functions of theCommittee Section with the assistance of experts where necessary, review and investigate the affairs of state corporations and make such recommendations to the President as it may deem necessary;

Section 27Verify source

Part VI

MISCELLANEOUS PROVISIONS

§ 28MISCELLANEOUS PROVISIONS - 28. Dissolution of state corporationsProvision

If the Committee advises that a state corporation is to be dissolved, nothing in this Act overrides the dissolution procedure set out in the law under which that corporation was established.

Section 28. Dissolution of state corporations Section Where the Committee ("the State Corporations Advisory Committee established by;") advises that a state corporation shall be dissolved then nothing in this Act shall be construed as derogating from the procedure by which the state corporation would be dissolved under the law by or under which it was established.

Section 28Verify source

§ 29MISCELLANEOUS PROVISIONS - 29. Offences and penaltyOffence

State corporations and their officers must render, submit, or make available for inspection records, books, accounts or information required under the Act; failing to do so is an offence punishable by a fine up to ten thousand shillings or up to three years' imprisonment or both.

Section 29. Offences and penalty Section A state corporation which, or an officer thereof who, fails to render or submit or make available for inspection any record, book, account or information required by or pursuant to this Act, or which or who restricts the Auditor-General (Corporations) or the Inspector ("the Inspector-General (Corporations) appointed as such under;") in the performance of his duties shall be guilty of an offence cognizable to the police and punishable by a fine not exceeding ten thousand shillings or imprisonment for a term not exceeding three years or both and section 23 of the Penal Code ( Cap. 63 ) shall, where the offence is committed by state corporation, apply mutatis mutandis . [Act No. 13 of 1988 , Sch.]

Section 29Verify source

§ 30MISCELLANEOUS PROVISIONS - 30. RegulationsProvision

The President may make regulations to better carry the provisions of this Act into effect.

Section 30. Regulations Section The President may make regulations generally for the better carrying into effect of the provisions of this Act and the powers conferred by this section may be assigned in accordance with section 18 of the Constitution.

Section 30Verify source

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2 referenced instruments

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Inspector-General's certificate the Court must give a decree which has effect under the Civil Procedure Act
Section 24

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Penal Code
Section 29

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