By Luke Anami
The boardroom war at The East African Portland Cement Company (EAPCC) is set to play out again as the Government launches new bid to oust the firm’s board after a court ruled that the cement maker is a State corporation.
Both Treasury and the National Social Security Fund (NSSF), two largest Government agencies and members of the Portland Cement Board have indicated their intentions to effect changes following the court’s decision.
Kenya’s second largest cement maker has for about seven months witnessed battles that were triggered by acting Industrialisation minister Amason Kingi’s decision to suspend Portland Board.
On December 22, last year, Kingi suspended the EAPCC’s board accusing it of fraudulent dealings in award of contracts.
The company directors hit back at Kingi, saying the minister wanted them out over a multi-billion shilling tender that the Government allegedly wanted to go to a local supplier. The High Court reinstated the board terming the minister’s move as illegal.
Now, the Government has signalled intentions to assume full control of the institution after the court ruling.
Insiders say the Treasury is set to write to shareholders to convene a meeting early next month.
NSSF, which holds 27 per cent stake, is said to be pushing for an additional seat at the board. The fund, has hit out at the management of EAPCC saying they were getting a raw deal from the firm.
“The performance of the EAPCC at the stock exchange is wanting. As shareholders, NSSF is not getting full value of its shares. There are issues of governance, which we also want addressed by shareholders. It is time we got another seat at the factory,” acting NSSF Managing Trustee Tom Odongo said.
“There is an order that has been extracted that clearly states that Portland is a State corporation,” Kingi, also Fisheries minister said in an interview with Business Weekly. “We have written to the Treasury which is the custodian of Government shares to move with speed and convene a shareholders’ meeting to determine the way forward.”
The main battle has been between the ministry and the company’s chairman Mark Karbolo and the Managing Director Kepha Tande. Karbolo and Tande took the minister to court when he suspended them arguing Portland was a private company and the minister had no powers to suspend them.
“As the parent ministry, it is the president who appoints the chairman. Karbolo had been sacked by the President but was reinstated through a court order. Consequently, I have instructed the PS to prepare a letter to inform the President over the matter,” Kingi added.
“State House will give direction on the exact position.”
However, Tande said he was not aware that the Government was in the process of convening a meeting to discuss his performance and said he would not comment on the matter, as he is not a shareholder.
“I am not aware of any meeting by shareholders. I don’t know what the shareholders are doing,” Tande said when contacted for comment.
But it is not going to be a walk in the park as other shareholders —Bamburi and Larfage are likely to throw their weight behind the embattled managing director and chairman as witnessed during the case. Competition in the cement market is stiff with the entry of new players.
Already Portland has warned that its full-year earnings could fall by more than 25 per cent after reporting a first-half loss of Sh175.4 million on high production costs and mounting competition.
The company temporarily shut down due to the boardroom wrangles in January that affected its production.
“The problem at Portland was never the issue of the constitution of the board but the people serving on it,” Dr Karanja Kibicho, the Permanent Secretary in the ministry of Industrialisation said moments after a presidential luncheon hosted by Kenya Association of Manufacturers at a Nairobi hotel on Friday.
