Minority shareholders cry foul over Rea Vipingo sale

KILIFI: Rea Vipingo Plantations Ltd held its final meeting as a public company on a rather low profile yesterday after the directors failed to declare a dividend. This happened amid discomfort about a multi-billion-shilling land deal that makes Centum one of the largest landlords in Kenya.

Tens of shareholders who attended the meeting in Nairobi told The Standard of their disappointment after the agenda on dividend payment was run through, with no declaration. "I am very disappointed we did not receive a dividend even after the company returned a huge profit last year," David Muriithi, a shareholder who had travelled from Kirinyaga, said.

Vipingo reported a Sh350 million profit last year, down from Sh444 million, with Chairman Oliver Fowler attributing the drop to much lower theoretical gains arising from valuation of biological assets.

Agricultural companies like Vipingo have discretion on valuing their biological assets, in this case the sisal plants, and this would typically affect the reported profits.

"As the final meeting, they should have considered paying a dividend as a send-off to us as minority shareholders," said Muriithi, who bought into the company when it went public in 1995.

George Ngerich, another shareholder who had travelled from Nakuru, said he was happy with the Sh85 that the majority shareholders and brothers, Jeremy and Richard Robinow, had offered in the buyout. "This is good business, considering that I bought in at Sh10.50," said Mr Ngerich.

Rea Vipingo, at the time of going private, had over Sh2.1 billion in its books as retained earnings in a stockpile of cash built over the years. Directors of Centum walked away a happy lot after the meeting, after they became the beneficial owners of over 10,500 acres of prime land in Kilifi.

Vast land

The deal that got shareholder endorsement yesterday saw Centum acquire the vast land at Sh180,000 an acre, for a total consideration of Sh2.1 billion. Some shareholders like Rose Ng'ang'a and Wilson Kamande, said they should have been granted the opportunity to buy part of the Kilifi land as was the case with Centum.

"I would be happy with just a small portion of that land, than the money we have been offered; land is way more valuable," Ms Ng'ang'a said. It does not feel right selling land to me, she added.

Alois Chami, the self-appointed shareholders 'spokesman', raised objections to several issues in the meeting, and told The Standard afterwards that he will not take the buyout offer.