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Moi associates eye Kenya Seed board takeover


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Moi associates eye Kenya Seed board takeover


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Farmers buy seeds from a Kenya Seed Company outlet in Eldoret. FILE PHOTO | NMG

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Summary

  • Confidants of former President Daniel arap Moi have moved to stage a fresh boardroom coup at the Kenya Seed Company as they race to wrest control of the firm back from the government.
  • Private shareholders of the seed firm led by its former CEO Nathaniel Tum have summoned an annual shareholder meeting with the intention of appointing new directors, hiring a chief executive and declaring dividends for the past six years.
  • The move sets the stage for a vicious battle with the government, which has insisted the company is majority owned by the State and that the Agriculture ministry has the role of tapping its directors and CEO.

Confidants of former President Daniel arap Moi have moved to stage a fresh boardroom coup at the Kenya Seed Company as they race to wrest control of the firm back from the government.

Private shareholders of the seed firm led by its former CEO Nathaniel Tum have summoned an annual shareholder meeting with the intention of appointing new directors, hiring a chief executive and declaring dividends for the past six years.

The move sets the stage for a vicious battle with the government, which has insisted the company is majority owned by the State and that the Agriculture ministry has the role of tapping its directors and CEO.

Ownership of Kenya Seed Company is contested with the private shareholders claiming a 60 percent stake while the government reckons the firm is a parastatal.

Mr Tum, Soet Kenya Limited, Paul Kandie and Joseph Otieno are among shareholders that have called for an AGM before March 14.

“We as private shareholders of Kenya Seed Company request the company to convene an AGM to be held within 21 days from today,” said the February 22 letter sent to Kenya Seed Company and seen by the Business Daily.

“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.”

The AGM notice has nine items on agenda, including appointment of a new board, approval of accounts and payment of dividends covering past six financial years.

Agriculture Secretary Peter Munya has dismissed calls for shareholder meetings by a faction of Kenya Seed Company directors, saying there was no board of directors in place to summon an AGM.

He reckons there was no vacuum in the company because his ministry is concluding the appointment of a board to run the company.

Mr Tum was controversially removed as CEO in 2003 following revelations that he had irregularly transferred ownership of the firm to the family of former President Daniel arap Moi.

Over the past 18 years, he has been fighting for control of the seed company in a war that is centred on a 2001 share sale deal that effectively transferred the parastatal to private hands with minority State ownership.

Mr Tum whose troubles began immediately Mr Moi left office in December 2002, now seems to have struck a rapport with President Uhuru Kenyatta’s administration as its term in office draws to a close.

He was a key member of the Moi-era elite that controlled the levers of power but lost out immediately the Narc administration under Mwai Kibaki took over.

The battle for control of Kenya Seed has also been in and out of court for years — including Mr Tum’s 2014 attempt to oust government-appointed directors through a shareholder meeting.

Mr Tum has a 3.89 percent direct stake in Kenya Seed Company.

Kenya Seed’s troubles started in 2001 after the management under Tum issued new shares and sold to the Moi-era elite in a transaction that diluted government stake from 52.8 percent to 40 percent.

Richard Leakey, who was at that time the head of the Public Service, wrote to Mr Tum, expressing reservations over the transaction.

The Agricultural Development Corporation, the agency that holds the government stake, also opposed the transaction but the Kenya Seed management ignored the objections and proceeded with the sale.

The private investors have reminded the company of the shareholding structure tilted in their favour.

“It should be noted that prior to the issue of shares in 2001, the private sector held a total of 48 percent shareholding and their ownership rose to 60 percent after the issue of new shares. All shareholders (pre and post 2001) have validly issued share certificates,” said the shareholders in the letter.

In 2003, senior managers led by Mr Tum lost a bid to reverse their dismissal when the government reclaimed the company.



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