KTDA unable to pay farmers, buy fertiliser after recent raid

Police officers keep vigil as DCI raids Kenya Tea Development Agency (KTDA) headquarters in Nairobi. [Boniface Okendo, Standard]

NAIROBI, KENYA: The Kenya Tea Development Authority (KTDA) says some of its operations have been crippled following a recent raid at its head office in Nairobi.

In a statement, the agency said the events commencing on April 16 disrupted the green leaf payment to farmers, procurement of fertiliser, and payment to suppliers and employees' salaries.

“Our initial review of what transpired reveals that payment records of 620,000 farmers, shareholders registers, title deeds, computers servers and hard disks were unlawfully retrieved,” says the agency in a newspaper advertisement.

It says it has nothing to cover up and as long as the proper and legal procedures are followed it will abide by the same.

Detectives from the DCI Serious Crimes Unit on Friday raided the Kenya Tea Development Agency (KTDA) head offices in Nairobi.

The officers took control of the seven floors that are used by the tea agency at Farmers Building on Moi Avenue.

The raid marked the start of forensic investigations into KTDA’s finances as demanded by the most radical critics of the Kenyan smallholder tea subsector model.

The raid was opposed by insiders as an attempt by the government to enter an industry it had ceded to farmers through the backdoor.

The agency on Saturday said that four staff members had been held hostage at the authority’s premises after it was blockaded by the police.

The investigators directed staff to move away from their computers and leave the building under the supervision of armed officers.

The raid came on the day the agency announced a Sh734 million dividend payout to farmers as profits from KTDA Holdings for the financial year ending June 30, 2020.

That was income earned from its subsidiaries.

KTDA problems started early last year when President Uhuru Kenyatta directed the Ministry of Agriculture to institute changes in the governance of KTDA, following an outcry from tea farmers that they were being short-changed.

In his address to the nation last year, President Kenyatta decried the low tea prices, delayed payments, low initial payment by KTDA and fluctuations in net income of tea farmers.

He said the operational and governance challenges at KTDA had denied tea farmers maximum returns on their produce.

He cited conflict of interest by directors and lack of clarity in the declaration of dividends by subsidiary companies as some of the major challenges.

“Empirical evidence abounds; as a result of poor corporate governance, farmers who would be earning about Sh91 per kilo for their tea, are currently earning about Sh41 with Sh50 per kilo going to brokers and middlemen,” said President Kenyatta.

“It is clear the governance of KTDA and entire marketing of tea will require to be restructured if we are to assure our tea farmers get more revenue from their tea sales.”

On March 12, 2020, the Uhuru issued an Executive Order directing the Tea Board of Kenya to conduct elections in all KTDA tea factories within 60 days. But KTDA bosses moved to court and obtained an injunction stopping the polls.