Five coffee farmers sue CS Munya, AG over KPCU sale
Five coffee farmers yesterday moved to court seeking to stop the sale of Kenya Planters Cooperative Union (KPCU) assets to settle debts.
In a fresh war to retain the dormant firm founded in 1937, Josphat Kimani, Solomon Ndua, Peter Ngangari, Peter Wangengi and Karanja Gathiru urged the court to halt the sale awaiting an appeal which had been filed challenging a meeting to elect new directors.
Through their lawyer, Thuita Guandaru, the five claim that there is no assurance their interests in terms of shares will be taken care of during the planned sale.
Liquidators have already been appointed to oversee KPCU’s assets sale. At the same time, Directorate of Criminal Investigations (DCI) was called in to investigate how and why the firm went under, and pursue those behind its fall.
Trade and Industrialisation CS Peter Munya initiated the sale process which is now being challenged in court.
The five farmers challenging the process say they visited KPCU headquarters last month to check on the progress of their payment for the coffee they had supplied.
According to the five, upon arrival, they were met by a contingent of police officers who informed them that the firm was under liquidation.
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The farmers claim they stand to lose if the court does not intervene.
“The applicants inquired how the commissioner of cooperatives could interfere in the affairs of a private company and purport to liquidate a solvent entity. It was at this point that the person in charge then directed the applicants to leave the premises lest they be arrested for obstructing government officers from carrying out their lawful duties,” states Lawyer Thuita.
Troubled KPCU brings together more than 700,000 small scale farmers through more than 400 coffee co-operative societies and about 300 coffee estates.
By 2014, it had an asset base of more than Sh5 billion and a share capital estimated at Sh76 million.
It was the sole coffee miller with peak production of about 130,000 metric tonnes of coffee in its hey days.
However, KPCU’s performance has since declined, largely due to liberalisation of the coffee sector, the removal of its milling monopoly in 1996, stiff competition from other coffee millers and marketers, poor governance and debts.
This led to its being put under receivership by Kenya Commercial Bank in October 2009 over failure to service an outstanding debt of about Sh644 million.
Yesterday, the farmer's lawyer told the court that his clients still believe KPCU can make its ends meet and also earn them a profit.
“The ex-parte applicants have so much faith in the company that they individually bought shares when the offer to buy the said shares was floated and they individually hold a sizeable number of shares in the company,” he said.
He said that they have been supplying coffee to KPCU knowing that it would be able to pay them and that they stand to lose if the planned sale proceeds.
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Kenya Planters Cooperative UnionKPCUcoffee farmers