Kenya Planters Co-operative Union directors ‘stage coup’

The entrance to the Kenya Planters’ Co-operative Union premises in Nairobi. PHOTO | FILE  NATION MEDIA GROUP

In Summary

• The move could effectively end KPCU tenure as a cooperative, removing it from the supervision of the Commissioner of Cooperatives and effectively from the Ministry of Industrialisation.
• The turn of events is a culmination of a dispute over elections called by the ministry which they said is threatening to scuttle the revival of the union that recently emerged out of receivership.

By MWANIKI WAHOME
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Kenya Planters Co-operative Union directors yesterday staged a coup against the Ministry of Industrialisation and Enterprise Development ahead of elections it has called for Thursday.

 

At an extraordinary general meeting convened on Wednesday, they led farmers to vote for an end to the union’s dual registration by deleting their listing under the Societies Act.

“We have always filed our returns with the Registrar of Companies. The net effect of the change in the articles of association is that we shall not be regulated under the societies Act,” KPCU chairman William Gatei said.

This could effectively end KPCU tenure as a cooperative, removing it from the supervision of the Commissioner of Cooperatives and effectively from the Ministry of Industrialisation.

The ministry had called for election of new directors on Thursday, which the current directors are opposed to.

The KPCU has been operating under dual registration, which allowed the government to appoint a director to the board and supervise it through cooperatives commissioner.

Mr Gatei said the double registration had complicated the working environment whenever the firm wanted to engage with investors.

'VULNERABLE TO SPECULATORS'

They also resolved to increase the shares from 780 million to Sh10 billion ostensibly to cushion farmers’ assets from speculators, arguing that under-valuation had made it a target.

“The under-valuation of the company has made it vulnerable to speculators who would want to sell-off the assets,” he said.

The turn of events is a culmination of a dispute over elections called by the ministry which they said is threatening to scuttle the revival of the union that recently emerged out of receivership.

The board was appointed in 2011, on an interim basis but confirmed last year and given a three-year term to oversee the revival of the union.

They warned that payment of coffee farmers’ arrears estimated at Sh130 million was at stake as there was a default clause in the financing agreement that does not anticipate change of board until 2016.

Last week Commissioner of Co-operatives Patrick Musyimi, however, said he was not aware of the financing agreements.

“I have not seen the financial agreements. But they can come to the office and explain these things. We are acting within the Societies Act in calling for the elections,” Mr Musyimi said. He insisted the elections be held.

The KPCU was placed under receivership in October 2009 by the Kenya Commercial Bank over a Sh644 million debt and the two were locked in a court dispute over the figures.

They, however, opted for an out-of-court settlement with the board negotiating for the amount to be reduced to Sh400 million.

Some Sh100 million was paid, leading to the lifting of receivership. The remaining Sh300 million will be paid over 10 years without interest.