Kenol kept State in the dark over Puma sale, PS says

The government was kept in the dark over the impending takeover of KenolKobil by Puma Energy of Switzerland, putting at risk the interest of minority shareholders, workers and creditors.

Energy Permanent Secretary Patrick Nyoike revealed that the ministry has not undertaken any due diligence in the expected takeover of the company, which was incorporated in Kenya in the 1950s.

The PS said as things stand, several issues such as staff interest have not been addressed, but he assured workers that the ministry is in contact with the management of the oil marketer to ensure they are adequately compensated.

Puma Energy, which has been trading in Kenya through its subsidiary Trafigura Limited, intends to acquire 100 per cent shareholding, a move that will see KenolKobil deregistered from the Nairobi Securities Exchange.

In 2006, a ship leased by Trafigura illegally dumped hundreds of tonnes of toxic waste in Abidjan, Côte d’Ivoire, leading to illnesses of over 100,000 people and the oil giant paid a fine of €152 million (Sh15.5 billion). The payment also exonerated Trafigura from further legal proceedings in Côte d’Ivoire.

“Puma Energy intends to pursue 100 per cent takeover where minority shareholders would have an option to sell their shares through a mandatory general offer at the same price as majority shareholders,” said Jacob Segman, chairman and managing director of KenolKobil.

The firm’s shares have since been suspended indefinitely from trading at NSE to curb speculative buying and selling.

Three major shareholders jointly own 54.71 per cent stake in the oil marketer. They are Wells Petroleum (24.91 per cent), Petroholdings Ltd (17.34 per cent) and Highfield Ltd (12.46 per cent).

Wednesday, Mr Nyoike told the parliamentary Energy, Communications and Information Committee that unlike other companies which intend to undergo a takeover, KenolKobil did not inform his ministry of the impending sale.

Due diligence

“We read in the papers of their-Puma-intentions to take over KenolKobil,” said Mr Nyoike.

READ: KenolKobil top shareholders to sell stakes to Swiss oil giant

“But I have been in contact with the company’s management, Mr Jacob Segman, the chairman and managing director over the intended sale. I undertake to do due diligence and address issues such as staff interest,” Mr Nyoike told MPs.

READ: New twist in KenolKobil’s tussle with workers over takeover

Committee Chairman James Rege criticised the ministry for failing to rise to the occasion to safeguard the interest of more than 350 Kenyan employees who may lose their jobs or that of creditors and minority shareholders who may have not been consulted.