Portland tests Adan with new term for its CEO

Mr Kephar Tande, EAPCC boss. The firm's board of directors wants the Industrialisation secretary Adan Mohamed offer Mr Tande's a new term. Photo/FILE

By BD REPORTER

IN SUMMARY
The board of the cement firm advised Industrialisation Cabinet Secretary Adan Mohamed to renew the term of Kephar Tande whose current three-year term is set to expire mid next month.
Last year, the government unsuccessfully attempted to oust eight EAPCC directors including the chief executive, accusing them of poor governanceThe law dictates that the boards of State-owned firms recommend the renewal of their CEOs’ term to the minister who can overrule the directors.

East African Portland Cement Company (EAPCC) has asked the State to offer its CEO a new term in what will be the first big test of whether the new government can work with the cement maker’s board.

The board of the cement firm advised Industrialisation Cabinet Secretary Adan Mohamed to renew the term of Kephar Tande whose current three-year term is set to expire mid next month.

“The board is satisfied with Tande’s work and we have asked the Cabinet secretary to offer him another term,” Mark ole Karbolo, the chairman of EAPCC, told the Business Daily in a phone interview Thursday.

“He (Mr Tande) showed interest in the job and the board reached the conclusion that he deserves another term. The board has done its job and it is now up to the minister to take action.”

Mr Tande’s appointment presents a challenge on whether the government had given up on overhauling the cement firm’s board including having a new CEO or whether will renew its bid to have new team shepherd Portland Cement.

Last year, the government unsuccessfully attempted to oust eight EAPCC directors including the chief executive, accusing them of poor governance.

The directors, including Karbolo, Kenya Airways CEO Titus Naikuni and lawyer Hamish Keith, moved to court to block the move following the State’s directive to disband the cement maker’s board.

The court reinstated them in a legal battle that also saw former President Kibaki’s appointment of Mr Karbolo’s replacement revoked.

But Portland Cement is now dealing with a new political regime following the March 4 election that saw Uhuru Kenyatta elected President and Mr Mohamed appointed head of the Industrialisation ministry from Barclays Bank.

Mr Karbolo says Mr Mohamed is yet to respond to the board’s advice to renew the CEOs term.

The law dictates that the boards of State-owned firms recommend the renewal of their CEOs’ term to the minister who can overrule the directors.

A debate has been raging as to whether the government’s power should be restricted to appointing directors who in turn appoint CEOs or State-owned listed companies should be run like other parastatals where ministers are involved and sometimes meddle in the appointments of chief executives and managers.

“The company is on a recovery path and Mr Tande has helped return the firm to profitability,” said the chairman, adding that EAPCC will announce a profit of a nearly Sh1 billion for the year ended June.

Portland, Kenya’s second biggest cement producer, recorded a net loss of Sh821.4 million in the year to June 2012 compared to net profit of Sh1.7 million a year earlier.

Its share at the Nairobi bourse has gained 14.85 per cent over the past six months to Sh55 in a period that saw rivals Bamburi Cement shed 2.2 per cent and ARM Cement gain 8.2 per cent.