MPs question sale of Portland shares to Tanzanian tycoon at half market price

EAPC leaders appear before Trade Committee over sale of Holcim shares to Kalahari Cement at Parliament, Nairobi, on Sept 25, 2025. [Elvis Ogina, Standard]

The Attorney General was not consulted in the process of acquiring East African Portland Cement (EAPC) shares by a Tanzanian tycoon, Parliament has been told.

This revelation came even as the National Treasury and EAPC differed over the implications of a planned sale of a 29 per cent stake to Kalahari Cement, owned by Tanzanian businessman Edhah Abdallah Munif.

While EAPC says the deal will change the ownership structure, the Treasury has maintained that the government stake remains unaffected and will continue operating as it has been previously doing.

Treasury’s Director General for Investment and Portfolio Management Lawrence Kibet dismissed reports that the deal will alter EAPC’s shareholding, saying Treasury’s 25 per cent and the 27 per cent held by National Social Security Fund (NSSF) had not been interfered with in any way.

“The structure of shareholding in EAPC remains intact and what has been changing is within private investors,” Kibet said when he appeared before the National Assembly’s Trade, Industry and Cooperatives Committee yesterday.

The MPs, led by committee chairman Benard Shinali and vice-chair Marianne Kitany, questioned why Treasury was seemingly defending the transaction, yet it is not involved directly.

They also had an issue with the process of valuation, saying that the Sh27 per share price offered by Kalahari was less than half the prevailing market price at the Nairobi Securities Exchange of Sh58–Sh64.

Treasury was also accused of purely relying on the Capital Markets Act and failing to seek the Attorney General’s advisory on conflicts with the Companies Act, which complicates off-market share transfers.

Last month, the Committee on Trade put the Competition Authority of Kenya (CAK) and Capital Market Authority (CMA) to task over the sale of shares to Kalahari Cement at an alleged price of Sh27.30 per share, and demanded to know whether a proxy is involved.

Keitany said if the sale is concluded, it would make the purchaser the largest shareholder at 41.7 per cent ahead of National Treasury with 25.3 per cent and National Social Security Fund (NSSF) at 27 per cent, which she described as "monopolistic takeover".

The committee said this heightens strategic uncertainty and raises concerns in the potential altering of corporate control and on minority shareholder protection, governance and compliance with the takeover rules.

“That gives the minority shareholders undue advantage, there is a lot behind the scenes. This  is also dominant in the East Africa and the larger part of Africa and it could be that this person is trying to control East Africa through this particular company, own major stake in Uganda and Tanzania, that already is dominance in the industry.

"This is a monopolistic kind of takeover and requires better analysis,” Keitany said last month.

Yesterday, Funyula MP Wilberforce Oundo insisted on the value for money and what the deal means to Kenyans.

“What does this mean for Kenyans when shares are transferred privately at half the market rate?” he wondered.

The EAPC board explained to the committee that the deal goes beyond an ordinary block trade, with the chairman, Brig (Rtd) Richard Mbabi, noting that the owner of Kalahari Cement also controls Bamburi Cement, which holds 12.5 per cent of EAPC shares.

“After the transaction, the beneficial owner will control 41.7 per cent of EAPC, a level of ownership likely to influence board voting rights and corporate decision-making,” Mbabi stated.

Although Treasury approved the deal, arguing that it met regulatory processes, EAPC told the committee that there is need to safeguard shareholders by ensuring the firm’s intrinsic value is reflected.

“EAPC board of directors' primary concern is that the transaction price of Sh27.30 per share is significantly below the current market price. It is the board's duty to safeguard all shareholders by ensuring the Company's intrinsic value is reflected in its performance.

"The transaction would still require successful registration of the shares and compliance with the Companies Act, State Corporations Act, and all relevant corporate governance frameworks,” said Mbabi. 

Mombasa Cement has the largest cement market share in Kenya at 33 per cent, with National Cement at 26 per cent, Bamburi Cement 22 per cent, and EAPC at 10 per cent.

Others are Rai Cement at five per cent, Savannah Cement 1.5 per cent, Ndovu Cement 1.5 per cent and other manufacturers at one per cent.