The Treasury has ejected four of its representatives from the Kenya Reinsurance Corporation (Kenya Re) board, including chairman Erick Gumbo, in a bid to quell tensions that have rocked the firm since last year.
Through a June 15 letter seen by the Business Daily, the Treasury informed the State-owned reinsurer that it had dropped Mr Gumbo, Abdirahin Abdi, Eunice Nyala and Zacharia Nyaaga from the board.
The changes emerged in the middle of a board spat that saw the suspension of Kenya Re CEO, Hillary Wachinga, and human resource manager Sally Waigumo for two months between September 2 and November 2, 2025.
The two were reinstated before the hearing of a court case that had been filed by Mr Wachinga over his ouster.
The Treasury did not back Ms Nyala and Mr Nyaaga for board appointments during Kenya Re’s annual general meeting (AGM) on June 19 in a vote that attracted 15 contestants.
However, it had backed Mr Gumbo and Mr Abdi for re-election, with the chairman coming top with 3.38 billion votes.
A month later, Treasury Cabinet Secretary John Mbadi dropped Mr Gumbo and Mr Abdi and forwarded a list of six people to sit on the Kenya Re board. The six include Mr Mbadi’s alternate.
“In line with the guidance provided by the Attorney-General that both majority and minority shareholders submit their proposed nominees and vote jointly, our understanding was that, upon completion of the voting, the National Treasury was to submit names for class B directors,” reads the letter.
The Treasury is said to have withdrawn its backing for Mr Gumbo and Mr Abdi as part of interventions to ease the fallout between management and the board, said a top State official who spoke anonymously because he is not authorised to do so in public.
The Treasury has a 60 percent stake in Kenya Re and holds sway on who sits on the board of the reinsurer.
The minority shareholders have petitioned the courts to compel the Treasury to cede more board seats in line with the company’s revised rules granting minorities three positions. The case is still ongoing.
The small shareholders’ court fight hinges on the firm’s change of internal rules in February this year that created two classes of shares.
The revised Articles of Association has cut board membership to nine from 11, with the government entitled to five elective seats on the board through class B shares.
The rules handed minorities three directors on the strength of their class A shares.
“A decision had to be made. Treasury has informed Kenya Re that the names it has provided are the individuals it wants on the board. A decision on who the new chairman will be is still pending, given the minorities’ court case,” said the source familiar with the matter.
The Business Daily reached out to Mr Gumbo for comment on the board changes. He promised to respond “in the afternoon” but had not by the time of going to press despite reminders.
The Treasury has retained six directors, including Jackline Nyandeje, Leah Rotich, David Muthusi, Irungu Kirika, Erick Korir and Omar Shallo.
The tension at Kenya Re found its way to the Employment and Labour Relations Court, where Dr Wachinga sued the board for not giving him a fair hearing in the build-up to his suspension. He later withdrew the case and was reinstated.
The suit revealed that Dr Wachinga had been suspended over what the board termed “not complying with instructions” in the handling of a disciplinary matter involving two of the reinsurer’s staff.
However, the reinstatement of the two did little to defuse tension at Kenya Re, which is in the middle of key strategic decisions, including working on setting up a subsidiary in Tanzania and a representative office in India.
The Treasury sources reckon that Mr Gumbo, who joined the Kenya Re board in June 2019 and was appointed chairman in June last year, was seen as having failed to ensure harmony between the board and the management.
The fallout, the source added, recently saw the last-minute cancellation of a Kenya Re international event meant to pitch for business despite the Treasury having approved it.
The Treasury’s proposed names at the board come in the middle of court wrangles pitting minority shareholders against the government.
The minority shareholders are dissatisfied with the way the June 19 AGM was conducted, arguing that they did not get fair representation on the board.
Kenya Re is yet to pick a new chairman and constitute board committees like audit, human resource and nominations, finance and strategy and risk and compliance.
Under the current Articles of Association, Kenya Re directors will be required to hold office for a maximum of two terms of three years each. A director will lose a seat if he or she is absent for three consecutive meetings without board approval.
The new rules also introduced the suitability criteria for an independent director, including the requirement that such a person should not have been affiliated with a political party in the preceding five years to the appointment.
In the financial year ended December 2025, Kenya Re maintained a Sh839.94 million dividend despite net profit retreating by 11.6 percent to Sh3.92 billion in the financial year ended December 2025 from Sh4.4 billion.
The reinsurer attributed last year’s profit drop to underperformance in the company’s international treaty business and its operations in Zambia and Côte d’Ivoire.
