President directs AG to probe KTDA, its bosses

Senior management and board members of the Kenya Tea Development Agency (KTDA) may be headed home as the government kicks off an investigation into the operations of the agency.

President Uhuru Kenyatta yesterday directed the Attorney General to conduct an inquiry into allegations of statutory and regulatory breaches committed by KTDA, one of the largest tea industry players in Kenya.

Among the ills KTDA is accused of include price fixing and abusing its dominance and having a grip on more than 620,000 smallholders.

The president also noted that the company may have in numerous instances acted contrary to Kenyan laws, including the Companies Act.

Broken laws

A key concern of the president, it appeared, is the interest of the smallholders, who he noted had been harmed by KTDA’s actions and are no longer in a position to cater for their needs sustainably or reinvest in the crop.

The president, in an Executive Order, directed the AG to investigate the firm for what he termed credible allegations as well as the extent to which it may have broken local laws.

“Attorney-General is directed to conduct an inquiry into the alleged statutory and regulatory compliance breaches allegedly committed by KTDA and or its directors including potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors’ fiduciary duties and other alleged malfeasances by or within KTDA,” he said, adding there was a compelling urgency to reform KTDA to be realigned in favour of small-scale tea farmers.

The president noted KTDA has been running “an opaque and exclusionary process” of setting tea prices that is “sharply dissimilar from the process in other comparative jurisdictions”.

Conflicts of interest

He also noted that KTDA’s network of subsidiaries, including those registered outside the country, are locked in inherent conflicts of interest while at the same time misaligned with the interest of tea farmers.

The president also ordered the Tea Board of Kenya to put in place mechanisms to enable tea factories hold elections. The board is among institutions set up by the new Tea Act, 2020.

The Act has faced resistance from the industry, with players trooping to court and getting orders restraining the Agriculture ministry from implementing the new legislation.

The president also issued the Executive Order Number Two on 2021 on Coffee Sector Reforms, in which he approved the Coffee Bill 2021 for tabling in Parliament.

Among the new approaches to reviving the industry include re-introduction of the Coffee Board of Kenya.

The Executive Orders were issued yesterday at State House, Nairobi, at a brief ceremony by the Head of Public Service Joseph Kinyua and attended by Cabinet Secretaries Fred Matiang’i (Interior), Peter Munya (Agriculture) and Mutahi Kagwe (Health).