Dozens of Kenyan government officials and business people have appeared in court since May on charges relating to the alleged theft of hundreds of millions of shillings from public coffers in a new drive to tackle widespread graft.
Hudson Andambi, an official at the ministry of petroleum has been picked as acting CEO of KPC, the ministry said, saying the move was due to "unfolding events at the Kenya Pipeline Company and the arrest of the top management."
"This is to ensure that operations continue without interference for purposes of ensuring security of supply of petroleum products," the ministry said in a statement.
Joe Sang, the MD of KPC, was arrested with four other senior officials in connection with the loss of an unspecified amount of money during the construction of an oil jetty in the western city of Kisumu, the Daily Nation reported on its website.
Police were not immediately available for comment. Sang did not answer calls to his mobile phone from Reuters.
In a statement the director of public prosecutions Noordin Haji said there was "sufficient evidence to support various charges" against six suspects related to the oil jetty project which cost 2 billion shillings ($19.55 million).
He listed the charges as abuse of office, failure to comply with procedures and executing a project without prior planning.
Sang, who has been in his post since early 2016, wrote to KPC's board earlier this week saying he would not seek an extension of his contract on its expiration next April. He cited unspecified personal reasons for his decision.
KPC's board said on Tuesday it had decided to allow oil marketing companies to carry out a forensic audit of their fuel stocks after they complained about excessive losses.
President Uhuru Kenyatta promised to stamp out graft when he was first elected in 2013, but critics say he has been slow to pursue top officials. No high profile convictions have occurred since he took office.
Also in another statement on Friday, the public prosecutor said he had sanctioned several charges including abuse of office, executing a project without proper planning and failure to comply with public funds management laws against 21 officials at the state-run National Hospital Insurance Fund.
The charges relate to an irregular award and extension of a contract in which 1.1 billion shillings was lost, he said. ($1 = 102.3000 Kenyan shillings) (Reporting by George Obulutsa, Humphrey Malalo and Maggie Fick Writing by Duncan Miriri and Elias Biryabarema; editing by David Evans)
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