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KTDA picks secretaries to oversee its factories

BUSINESS
By Wainaina Ndung’u | July 22nd 2020

A tea farmer on his way to deliver green tea leaves at a buying centre in Mathira, Nyeri County. Small-scale farmers have welcomed proposed regulatory remedies by the government to protect them from middlemen. [Kibata Kihu, Standard]

Still smarting from radical government proposals that could weaken its stranglehold of the smallholder tea sub-sector, the Kenya Tea Development Agency has let go of centralised company secretarial services for its factories.

The agency’s management services wing (KTDA-MS) has effective June 1, 2020, opted to appoint six company secretaries to offer services to the 66 factories, which are independent limited companies.  

Having one company secretary for the KTDA group and its affiliated companies has been one of the most contentious issues farmers have consistently raised, blaming it for a tightly-controlled electoral system, which weeded out perceived rebels from becoming factory and agency directors.

Those intending to vie for factory directorship were, besides being required to have produced a set minimum of green leaf per year, were also required to be approved by a committee headed by the powerful company secretary. However, the appointed secretaries will still be reporting to the head office.

If they passed that hurdle, they also had to garner the majority of weighted share votes in their electoral zones during elections.

Some farmers lobbies such as the Bomet/Kericho Tea Reforms Lobby had also cited the difficulties that perceived rebels had been encountering while seeking to acquire the electoral roll ahead of elections.

Meru County Assembly Tea Association (Mcata) chaired by Dennis Kiogora (Abogeta West) supported independent company secretaries for the factories, saying it would remove undue patronage.

The reform proposals for the tea sector by the Agriculture CS Peter Munya had sought to cure the stringent control of the electoral system by excluding the company secretary service from the management agency contract.

Yesterday, another tea farmers lobby, Tea Farmers Action Group headed by a former director at Chinga Tea Factory, Ndegwa Wanyaga, said decentralising the company secretarial service was against the spirit of the reforms proposed by the government.

“There has to be total corporate separation which must include no shared company secretarial services, no shared board members and no shared money or accounts,” said Wanyaga. “In a nutshell that is the most progressive element of the proposed regulations.”

According to Wanyaga, control of director elections remains the key contention in the KTDA system, which saw a long-drawn legal suit at the Kiru Tea Factory in Murang’a County.

The decision in the Kiru factory case strongly supported the separation of the roles of company secretaries between KTDA and its affiliated factories, saying it conformed with the Companies Act, 2015.

Toror/Tegat Tea Farmers spokesperson John Chebochok said it has been noted that KTDA is seeking to devolve company secretarial function in gross violation of the tea regulations.

Chebochok said the purported re-organisation seeks to zone secretarial services whereas the regulations stipulate that factories will appoint their own secretarial services. “This attempt to hoodwink the farmers and circumvent the law must not be entertained,” said the official.

Legal services

“Farmers’ proposal was the disbandment of Ken Omanga’s (company secretary) office and not decentralising it. It’s our view that KTDA should hold their horses while the minister of Agriculture is implementing the regulations,” said Chebochok.

KTDA said its corporate services department provided secretarial and legal services for KTDA-managed factories as guided by the Sessional Paper No 2 of 1999 and the management agreements with the respective factories.

“These staff are and remain employees of KTDA-MS providing services to the tea companies under the management agreement. These are internal and organic changes which have always taken place since KTDA was privatised in 2000,” KTDA Corporate Communication department said in response to a query yesterday.

It added that the shared services between the 69 factories enabled them to take full advantage of economies of scale and the new arrangement had no additional cost implications on farmers.

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