KTDA alleges government interference in tea affairs.

Reporting by James Mutua 

The Kenya Tea Development Agency (KTDA) Holdings Board, together with the chairpersons of 54 factory companies, has expressed deep concern over escalating interference from government officials and politicians in the management of smallholder tea factories. According to the board, this interference is undermining the stability of the tea sector and negatively affecting farmers’ livelihoods.

In a statement issued today, KTDA highlighted several instances of interference that have disrupted their operations and hurt the industry. One of the most significant issues cited was the removal of the reserve price for tea by the Ministry of Agriculture without any consultation with KTDA directors. This decision, they claim, has caused a drastic decline in tea prices at the Mombasa Tea Auction, directly impacting farmers’ incomes.

The statement also raised concerns over unilateral pronouncements by the Agriculture Permanent Secretary regarding the separation of satellite factories from their mother factories, without factoring in the property rights and interests of farmers. KTDA further accused government agencies of convening impromptu meetings with factory directors, the costs of which have been unfairly passed on to farmers.

One of the most contentious cases of interference involves the Michimikuru Tea Factory. KTDA noted that a transparent and democratic election was held on June 29, 2024, which resulted in the appointment of a new board of directors. However, a faction of shareholders dissatisfied with the outcome called for a special general meeting that purportedly led to the election of a rival board. This occurred after the Annual General Meeting (AGM) scheduled for December 6, 2024, was disrupted, preventing it from proceeding. The Registrar of Companies later granted a 90-day extension to the AGM.

KTDA also criticized the Agriculture Permanent Secretary for visiting Michimikuru Tea Factory with a local Member of Parliament and declaring the elected board suspended without prior notice. This declaration, according to KTDA, violated the Companies Act and the principles of natural justice, as the board was not given an opportunity to be heard.

The statement further alleged that officers of the National Police Service aided in convening illegal meetings at Michimikuru and failed to contain violence during the disrupted AGM. KTDA subsequently sought judicial intervention, and the courts issued an injunction to halt the implementation of any resolutions passed during the disputed meetings. The organization emphasized that the legality of these meetings and their resolutions is now a matter before the court, urging all parties to respect the judicial process.

KTDA also addressed the broader impact of these disruptions on the tea market. The organization stated that political wrangles and negative media coverage have diminished international buyers’ confidence, leading to low absorption of tea in global markets. This, in turn, has adversely affected farmers’ earnings.

The agency made a strong appeal to stakeholders, including government officials, to refrain from interfering in the management of boards elected by farmers. KTDA reiterated that any concerns can be addressed through constructive dialogue, rather than actions that undermine the sector.

As an organization committed to transparency, KTDA reassured stakeholders that the resolution of these issues would be guided by legal and corporate governance principles. The current board and management, the statement emphasized, will continue to serve the interests of shareholders, employees, and the public.

KTDA also announced that it is seeking an appointment with President William Ruto to discuss these matters and chart a way forward. The organization pledged to provide updates as the situation unfolds and reaffirmed its dedication to protecting the livelihoods of farmers and the stability of the tea industry.

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