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KTDA fights Munya reforms as factories elect fresh directors

BUSINESS
By Boniface Gikandi | March 24th 2021

The tug of war between directors of the Kenya Tea Development Agency (KTDA) and reformists seeking to enforce the Tea Act, 2020, in Murang’a County has escalated. The agency’s officials insist they are still legally in office.

The KTDA brigade comprising directors from all the 10 factories in the county convened at Ngere Tea Factory in Gatanga Sub-county to discredit the government-backed elections held last weekend in six factories. But at the same time the new directors were ushered into the factories by police officers, and proceeded to elect chairpersons and their deputies.

The turn of events in Murang’a is being followed closely as more of the 69 KTDA factories prepare to hold their own Special General Meetings (SGMs) to oust directors and elect new ones due to a fallout playing out in court over the implementation of the contentious Tea Act, 2020.

KTDA is among the tea value chain bodies that have gone to court to challenge the Act. The agency was, however, dealt a blow when President Uhuru Kenyatta issued Executive Orders allowing the Ministry of Agriculture to push through with reforms in the sector.

Dealt a blow

Yesterday, a case challenging the implementation of the Executive Orders came up at the High Court in Nairobi, where KTDA sought to stop the SGMs.

No hearing however took place, and no orders were issued because the judge assigned to hear the case was indisposed. The matter was put off to today.

A schedule of the tea factories’ SGMs released by Agriculture Cabinet Secretary Peter Munya (pictured) shows the meetings will move on to Ngere, Gacharage, and Gatunguru factories in Murang’a, as well as Kirinyaga and Nyeri factories next Wednesday, then on to Kiambu factories on April 10.

On Wednesday, April 21, it will be the turn of Embu and Meru factories before Nyamira and Kisii factories hold their meetings at the end of April. On May 12 the remaining factories in Kericho, Bomet, Nakuru, Trans-Nzoia and western Kenya are scheduled to hold special meetings, thus completing a journey to reform the sector.

But on Monday, KTDA Murang’a directors, led by Ngere Tea Factory vice chairman Henry Kinuthia, said the weekend elections were “shambolic and conducted in disregard of the Companies Act.”

The officials claim they are the legitimate directors, as provided by law, and that they can only be removed through the formula stipulated in the respective memorandum and Articles of Association.

“We are calling on the government to establish the Tea Board of Kenya to streamline the sector, as stipulated in the 2020 regulations,” said Mr Kinuthia.

“In a total disregard to the law, Agriculture CS Peter Munya in September last year blocked the KTDA from conducting directors’ elections as stipulated in the company law. He instead turned around and supported a clique of people to hold the shambolic elections, yet they have other motives.”

Seeking dialogue

The directors, Kinuthia added, “are seeking a dialogue session with Mr Munya to deliberate on the future of the sector.”

The factories that convened a SGM are Njunu, Nduti, Ikumbi, Kanyenya-ini, Githambo and Makomboki.

Kiru factory will hold its meeting on April 16, a session that is expected to be closely followed after board chairman and lawyer Chege Kirundi kicked off the battle for reforms after successfully leading a move to replace John Kennedy Omanga as company secretary.

Mr Kirundi will be seeking shareholders’ consent to negotiate a fresh management agreement with a licensed managing agent.

Makomboki Tea Factory directors picked Moffat Mbue as chairman and he will be deputised by Patrick Njiiri. At Njunu Tea Factory, David Gitau was elected chairman.

Former KTDA director Alex Macharia was elected to chair the board at Kanyenya-ini Tea Factory in Kangema, while Mary Wanjiru Gitaka was made his deputy.

At Nduti Tea Factory, the board will be chaired by Eunice Wangari Njuguna, who will be deputised by Samuel Kamau.

David Gitau was elected to lead Njunu Tea Factory, while John Matheri was elected vice chair.

Mr Mbue, who organised the elections, told The Standard the new directors had experienced challenges after taking over the management of the factories following a decision by farmers.

“The boards will be in charge of the running of the factories, as the names of the officials have been submitted to the office of the Registrar of Companies,” said Mbue.

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