Mkulima today we cover why the battle lines are drawn at Kenya Seeds Company Limited and the government brought the big guns. The fight for the soul of the company has been ongoing for years between the government and close allies of the Moi family.
Kenya Seed Company Limited
The Kenya seed company is one of the government parastatals that work day and night to support the agricultural industry in Kenya.
This they achieve through the production of certified seeds like maize and through their subsidiaries like simlaw seeds that produce seeds for vegetables.
There is great discomfort at the company’s boardroom and there are looming changes with the former president’s family keen to take control. Today we cover why the Moi family wants to take control of the Kenya Seeds Company from the government.
Close confidants of former President Moi have moved to stage a fresh coup at the parastatal as they race to take control of the organization from the state.
Private shareholders at the company led by the former CEO Mr. Nathaniel Tum have called for an annual shareholders meeting with the intention of
- appointing new directors
- employing a new CEO and
- declaring dividends for the past six years
This action sets the stage for the battle for the soul of the company with the government through the ministry of agriculture.
The ministry maintains that the state is a majority shareholder at the firm and the ministry of agriculture has the role of selecting who becomes the next CEO and the directors.
Kenya Seeds Company Limited Ownership
One of the main fronts of the battle for the soul of the company is who really owns it. If the war continues the farmers might suffer as a result of instability at the state firm and corruption might take root.
Though the battle lines have been drawn the two sides are yet to come to an agreement on who really owns the company.
Private shareholders maintain that they own 60 percent of the company therefore the controlling stake while the government officials maintain it is a parastatal and therefore under the direct control of the ministry of agriculture.
Some of the members who say they own the company and have called for an annual shareholders meeting include
- Mr. Tum
- Soet Kenya Limited
- Mr. Paul Kandie and
- Mr. Joseph Otieno
The team sent a letter dated February 22 to the Kenya Seed Company management requesting the AGM. Part of the letter read “We as private shareholders of Kenya Seed Company request the company to convene an AGM to be held within 21 days from today”
“If no meeting would have been called by the company as per the Companies Act, the private shareholders will go ahead to requisition for one.”
Some of the Kenya Seeds Company Limited AGM notice agenda include
- Appointment of a new board
- Approval of accounts and payment of dividends covering the past six financial years
The ministry of agriculture through the CS Peter Munya has dismissed calls for shareholders meetings by a faction of the Kenya Seed Company directors, saying there was no board of directors in place to summon an AGM.
He reckons there was no vacuum at the company because his ministry is concluding the appointment of a board to run the company.
Former Kenya Seeds Company Limited CEO Mr. Tum was controversially ejected from the company in 2003 after revelations emerged that he irregularly transferred the ownership of the company to the family of the former President Moi.
As a result of over ten years, he has been fighting to take control of the seed company.
His arguments are based on a 2001 share sale deal that effectively transferred the company to private hands with the state being a minority shareholder.
The former Kenya Seeds Company Limited CEO’s troubles begun after the former president’s party of KANU lost the 2002 elections to the opposition led by former President Kibaki. In the recent past, he has worked his way through the corridors of power and seems to have found favor in some offices of the current government led by President Kenyatta as his presidential term comes to an end.
Mr. Tum was one of the leading voices in the government during the KANU administration but fell out of favor immediately after the elections and was shown the door.
The war has been on for a long period of time and the battle been fought in different fields including the corridors of justice. In 2014 Mr. Tum went to court in order to remove the then board selected by the government out of office. His plan was to call a shareholders meeting in order to effect changes at the company with support from the court.
As per the records Mr. Tum owns 3.89 percent of the Kenya Seed Company. The company’s troubles started in the year 2001 after the management under the then CEO Mr. Tum issued new shares effectively making the government a minority shareholder.
The new shares were then sold to the then-powerful government officials in President Moi’s government.
The government was then left with 40 percent an effective dilution from the 52.8 percent before the changes were made.
The then head of Public Service one Mr. Richard Leakey, wrote to the Kenya Seeds Company Limited CEO, Mr. Tum expressing his reservations over the transaction.
Agricultural Development Corporation, ADC the agency that directly owns and holds the shares and ownership on behalf of the ministry of agriculture and in part the government also raised concern about the issues but Mr. Tum and his team ignored and proceeded with their plans.
The private shareholders were quick to remind the company management of the shareholding structure ate the firm and how it favored them.
“It should be noted that prior to the issue of the shares in 2001, the private sector held as a total of 48 percent shareholding and their ownership rose to 60 percent after the issue of the new shares. All shareholders (pre and post-2001) have validly issued certificates,” said the letter addressed to Kenya Seed company management.
After the loss of the KANU government in 2002 and the dismissal of Mr. Tum and his team, senior managers lost their bid to reverse their dismissal from the company when the NARC government under the leadership of former President Kibaki took control of the company.
Credits: Gerald Andae / BD
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