Standoff as board, Government disagree on new Kenya Planters of Cooperative Union polls

KPCU wakulima house

There are fears renewed  turf  wars could see the giant miller placed under receivership again 

The Government’s resolution to have coffee farmers elect new directors to the Kenya Planters of Cooperative Union (KPCU) might have the former giant coffee miller placed receivership again by the Kenya Commercial Bank (KCB), officials have warned.

Government wants farmers to elect 15 new directors on Thursday but the current management has protested the order. They warn the move will destabilise the organisation again. The board has instead called for a special general a meeting on Tuesday to chart the way forward. The directors also claim investors who recently recapitalised the Sh100 million are likely to quit, a situation likely to ground KPCU again.

scuffling efforts

William Gatei, board chair asserts that the Commissioner of Cooperatives Patrick Musyimi and Industrialisation and Enterprise Development Cabinet Secretary Adan Mohamed are out to interfere with the revival of the society. “Our concern is that the Government is scuffling efforts to start operations again, weeks after coming out of receivership,” said Gatei in phone interview.

“We successfully managed to negotiate with the bank, which agreed that we pay Sh400 million with the initial payment of Sh100 million. A consortium of investors contributed the amount.” He explained that the agreement the institution had with the bank has a default clause that warns of another receivership in case of single non-payment of the loan. Contacted, Musyimi stated that the elections will be held as planned.

In a phone interview, Musyimi said the elections are legal and all the farmers are eligible, including interim directors. “Our mandate as government is to facilitate cooperative societies to achieve sound governance so that they can pool their resources together. Any dealing the board may have negotiated with other investors or lenders must be sanctioned by the farmers and as per the cooperative regulations,” said Musyimi. He insisted the current directors were elected as a caretaker board and that they have to seek fresh mandate from farmers.

Key mandate

The Gatei board was elected into office on July 2012 and its key mandate was to work with KCB and have the receivership lifted among other issues which they have achieved.

Farmers from Mt Kenya region have joined the fray and want government to ensure elections are conducted as per the cooperative law. Watson Kimathi and Peterson Muthathai, both from Embu and Meru respectively said dealings the interim directors have brokered with any investors need and must have the blessing of the investors.

“Further, we want to know how the directors agreed to pay Sh400 million to the bank. Also, the receivers need to disclose how much they collected from all the rent of the leased building for the last four and half years they have been operating the facility,” said Kimathi.

“KPCU belongs to us all as farmers and not to a few individuals. The elections are in order and we are ready to participate so that we can have the full control of the organisation,” said Peterson Muthathai, who is contesting to represent coffee estates from Mt Kenya region in the board.

KPCU was active in coffee business until October 2009 when it was placed under receivership over Sh644 million debt by KCB and Deloitte & Touche consulting firm.

Business
Premium Ruto's food security hopes facing storm amid fake fertiliser scam
Real Estate
Premium Affordable housing: Will State's data-backed action now pay off?
Business
Premium Nairobi business community plans protest as over 700 containers held at port
By Peter Muiruri 32 mins ago
Real Estate
Premium Building to the skies, but at what cost?