Cartels in the tea sector are believed to have invented a way of working with former Kenya Tea Development Agency (KTDA) bosses to frustrate the new board chaired by Chege Kirundi.
In a cocktail combination of former directors and board
chairmen, the ring of cartels now under investigations by the Directorate of
Criminal Investigations is out to fight policy programs outlined by Kirundi.
Engineered by former Director Kennedy Omanga, former Chief
Executive Officer Lerionka Tiampati and Peter Kanyango the cartel has also
teamed up with former board chair Enos Njeru,his predecessor David Ichoh in
efforts to derail reforms at the agency.
The trio of Kennedy Omnga, Peter Kanyago and Lerionka
Tiampati was kicked out of office in 2021 following the Presidential Executive
Order issued in March the same year to pave the way for investigations into
possible corruption at the agency.
The Executive Order No. 3 of 2021 directed the Attorney
General to investigate KTDA for regulatory breaches and this culminated in the
appointment of a new KTDA Board in June 2021.
Peter Kanyago got replaced as chairman to the board rby
David Ichoho who was later replaced by Enos Njeru. Consequently, all senior
management across all KTDA’s subsidiaries to get replaced and, at the same
time, sparked a flood of court cases that still bleed the organization to date.
The cartel has from last year thrown its weight behind Njeru
who took over in July 2023 and fought tooth and nail to block the appointment
of Chege Kirundi as new board chairman.
After losing the court battle to block Kirundi from
occupying office, Njeru has been working behind the scenes alongside cartels
that have controlled the sector to oppose the new reforms proposed by the
government.
A court ruling threw out his petition over lack of merit
paving way for a new era and putting the agency on the reform path.
History of the cartel
The Audit report done by a multi-agency team and chaired by
former Attorney General Paul Kihara implicated various senior officials at KTDA
and made recommendations for prosecution by relevant state agencies.
The report stated that as at June,8 2021,there were
cumulative loans of Kshs 4,233,433,663.46 billion from Citibank ,Proparco and
Absa Bank guaranteed by KTDA.There were also Asset finance loans offered by
Co-operative Bank,Absa and Standard Chartered Bank amounting to USD
1,291,627,562.26 which were signed against fixed deposits of Ksh 5.947,947,607
held by KTDA in various banks.
“In considering how irrational borrowing is done at
KTDA,there is a possibility that the organisation may have over committed
itself,” the report states
The report also indicated that the former KTDA directors did
not disclose debt exposure by deliberately failing to register charges and
mortgages to each borrowing made in accordance with section 8B3 of the
Companies Act.
Following this, the report recommended that KTDA-H Group
Head of legal should be prosecuted for professional misconduct and negligence
for failure to ensure the preparation of charges and mortgages.
Other recommendations
Remit funds for tea sales to the tea factories in accordance
with Section 36(6) of the Tea Act 2020 which requires that 50 percent of tea
sales should be paid to the farmer within 30 days.
All debentures must be registered at the company registry by
August 31,2021 and the board should enhance its risk management policy related
to company borrowing to ensure that KTDA-H borrowing limits are adhered to.
Senior management of KTDA involved in approving purchase of
rocky land LR.No 10024/4 IR.27609 at Ksh 59,400,000 be surcharged.
Those involved in purchase of Nyandarua / olbolsat
swampy land at Kshs.28,003,500 be surcharged and those involved in approving Sh
38,164,469 million as legal fees be surcharged as well.
That there was direct loss of Ksh 370 million by KTDA MS at
the expense of Kagwe Tea Factory Company Ltd.Arising from this loss Kagwe Tea
Factory Company Ltd had to borrow money to finance it's operations.
Total mess
In total some 620,000 small scale tea farmers lost over
Sh600 million in dubious transactions by top officials at KTDA as per the audit
report
The cartel has been reaching out to fraudulent suppliers who
had almost brought KTDA to its knees as the plot legal battles aimed at
curtailing Kirundi and his team from working effectively.
The new development comes at a time the agency has rolled
out plans to unveil a new strategic plan in July 2025 under the leadership of
Chege Kirundi.
KTDA has lately been managing the smallholder tea factories,
where famers receive big bonuses,a move that the former bosses want to
fight despite having initiated the same.
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