PS Rono orders audit of loans obtained by tea factories

Agriculture PS Paul Rono launches the FINAS 2025 Summit at Serena Hotel, Nairobi. [David Gichuru, Standard]

All loans obtained by tea factories under the Kenya Tea Development Authority (KTDA) will be audited in the next 14 days to determine their accuracy and utilisation.

Agriculture Principal Secretary Dr Kiprono Rono said the comprehensive audit of the loans obtained by 70 factories will be conducted by the Tea Board of Kenya (TBK).

He said TBK, the tea industry regulator, will investigate how the loans obtained are utilise and the terms and conditions under which the loans were secured.

The PS in a circular dated October 22 mandated TBK by Chief Executive Officer CEO Willy Mutai, to establish the current outstanding loan balances for every factory.

"The findings of this audit will enable the ministry to evaluate the financial sustainability of the factories and to formulate appropriate operational measures aimed at addressing the challenges currently facing the tea subsector," read part of the circular.

Julius Mwaura, a farmer affiliated with the Makomboki tea factory, lauds the directive as a bold step towards accountability, transparency, and restoring trust in the management of farmers' resources within the tea industry.

"The directors in many of the factories have obtained unnecessary loans, where some apply for overdrafts to pay better bonus payments to avoid the wrath of the farmers," said Mwaura.

Elsewhere, the KTDA, in a move designed to improve governance and reduce operational costs, suspended all staff travel, off-site meetings, and training activities across its subsidiaries.

The organisation's CEO, Mr Wilson Muthaura, in an internal memo, suspended staff travel until further notice, including those on the subsidies, unless authorised and cleared by his office.

In a memo dated October 21, it was ordered that no travel-domestic or international-for any business-related purpose shall occur without prior written authorisation from the Group CEO.

The circular addressed to general managers, heads of subsidiaries, and department heads, KTDA management said the decision aligns with the group's ongoing governance, compliance, and cost-management priorities.

"The memo further directed that all external meetings, including those held at hotels or within tea factory locations, are prohibited unless expressly approved in writing by the Holdings Board, upon formal submission and recommendation by the Group CEO.