The arrest of Mr Sang and his managers will add to the troubles at KPC and will lead to a managerial shake-up in coming days.
Mr Sang and his senior managers will also be charged with abuse of office for “improperly awarding tender number KPC/PU/006-047” to Southern Engineering Company at a cost of Sh1.9 billion against Sh1.4 billion, which had been approved.
The court will also be told that the top managers, together with others not in court, conspired to commit an economic crime and steal Sh1.9 billion.
They will also be charged with failing to comply with the procurement laws and failing to follow applicable procedures and guidelines relating to procurement in the award of Kisumu oil jetty tender.
Outgoing Kenya Pipeline Managing Director Joe Sang has been arrested in the ongoing investigation into loss of funds during construction of Sh1.9-billion Kisumu oil jetty.
Mr Sang and four other officials of the state corporation were arrested on Friday morning in the capital Nairobi.
The other suspects locked up are company secretary Gloria Khafafa, head of procurement Vincent Cheruiyot, procurement manager Nicholas Gitobu and general manager in charge of infrastructure Billy Aseka.
Hours after the arrests, Petroleum Principal Secretary Andrew Kamau announced the replacement of Mr Sang with Mr Hudson Andambi as the acting MD.
Until his appointment, Mr Andambi was the ministry's senior principal superintending geologist in charge of petroleum.
"This is to ensure that operations continue without interference for purposes of ensuring security of supply of petroleum products," Mr Kamau said on Friday in a statement.
The KPC arrested officials will be charged with seven counts, including theft of Sh528.5 million during the construction of the Kisumu oil jetty.
Last week, Mr Sang told the KPC board that he will not wish to get a second term once his current contract expires in Apr 2019.
The announcement came as the board invited crime busters to investigate the disappearance of more than 21 million litres of fuel, which KPC claimed to have either spilt or was stolen by vandals.
Mr Sang said he was leaving “due to personal reasons”.
Already, KPC chairman John Ngumi has invited oil marketing companies (OMCs) to conduct forensic audit of stock positions, which will essentially be examining Mr Sang’s management.
Ten leading oil marketers had written a joint letter dated October 26, 2018 in which they demanded to conduct their own forensic audit to check the accuracy of stock statements issued by KPC and get to the bottom of what was turning to be bogus records of loss.