Cash-strapped Sot Tea Growers Sacco has offered to sell shares worth Sh170 million to keep the institution afloat.
The Sacco’s management said it was selling the stake to Embomos Tea Farm in Konoin, which is also in Bomet County, ahead of the expiry of a deadline issued by the industry regulator.
“A deadline issued to us by Sacco Societies Regulatory Authority (SaSRA) to put our house in order is fast approaching, and through an elaborate plan, we are offering the shares to the tea farm owned by the county government of Bomet,” Sot’s chairman, Zakayo Sang, said.
He said the Sh170 million would enable the Sacco pay off more than Sh100 million in tea bonuses owed to its members.
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“As we race to stabilise out financial liquidity, we also have in mind members who are yet to receive their last year bonus because of our financial woes, and savings worth more than Sh30 million owed to account holders,” Sang said.
He added that the share-sale decision was reached by a technical team that included the Sacco’s management and Bomet County’s co-operative department.
Besides the cash flow problems, the Sacco is also facing a leadership row, pitting the founding leaders against interim officials picked to steer the institution out of financial troubles.
A week ago, the interim officials were ousted from office. Sang said this was after members resolved that the officials’ three-month term had lapsed.
“The move to have them out was in order as the three-month period for interim officials to stay in office had lapsed. Though they were resistant, they had to leave after more than 400 delegates resolved that the founding officials of the Sacco resume office.”
Sot’s financial woes began after the Sacco borrowed about Sh400 million from a commercial bank to set up a Sh700 million tea factory. Servicing the loan, Sang said, has consumed most of the farmers’ dues.
“The bank started deducting money we borrowed to build the factory last year when the tea bonus was released into our accounts, and we have not been able to pay our members their dues,” Sang said.
The share sale may, however, face hurdles if Bomet leaders veto the move. Already, Singorwet Ward MCA Joyce Korir has said the law does not allow the county government to invest in a private entity.