Uhuru orders probe into KTDA activities and tea factory elections

A group of women picks tea leaves. President Kenyatta says KTDA is locked in inherent conflicts of interest that are also misaligned with the interest of tea farmers. FILE PHOTO | NMG

By JOHN KAMAU
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Summary

• Attempts to revitalise the tea sector have been met with resistance from KTDA.
• The inquiry will look into KTDA's activities and those of its subsidiaries.

Cartels in the tea sector are set for more trouble after President Uhuru Kenyatta directed the Attorney General to conduct an inquiry into the workings of the giant Kenya Tea Development Agency (KTDA) and the activities of directors.

President Kenyatta has also ordered elections of directors of the various factories to be conducted within the next 60 days and ordered the Cabinet Secretary for Interior Fred Matiang'i and CS for Agriculture Peter Munya to ensure the "full implementation" of the Executive Order.

The directive, contained in Executive Order no 3 of 2021, and which was signed on Friday afternoon, also orders the AG Kihara Kariuki "to conduct an inquiry into the alleged statutory and regulatory compliance breaches allegedly committed by KTDA and its directors."

This, the President says, include "potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors' fiduciary duties."

The inquiry will also look at "any other… malfeasance within KTDA."

Attempts to revitalise the tea sector have been met with resistance from KTDA and the East African Tea Traders Association (EATTA) which has gone to court to stop key sections of the new tea laws from being implemented. 

In the Executive Order, President Kenyatta lamented that the setting of tea prices in Kenya "remains an opaque and exclusionary process that is sharply dissimilar from the process in other comparative jurisdictions."

Another observation is that "KTDA's network of subsidiaries, which includes offshore subsidiaries, are locked in inherent conflicts of interest and are also misaligned with the interest of tea farmers."

The President has also ordered CS Munya, the Attorney General and CS for Industrialisation and Trade to take "immediate remedial measures to ensure that each of the subsidiaries of KTDA has separate governance structures and that the profits from each of the subsidiaries, is reflected in farmers' incomes."

The inquiry will look into KTDA's activities and those of its subsidiaries, including KTDA Management Services, Chai Trading Company, Kenya Tea Packers (Ketepa), Majani Insurance Brokers, Greenland Fedha, The Tea Machinery and Engineering Company, KTDA Power Company and the Dubai Based KTDA DMCC.

Meanwhile, and in a separate order, President Kenyatta has approved the tabling of the Coffee Bill 2021 for consideration.