National Social Security Fund (NSSF) Managing Trustee Tom Odongo. Photo/FILE
What you need to know:
NSSF has forwarded nominee to cement firm after it raised stake in the company above 15pc.
The National Social Security Fund (NSSF) is set to reclaim a seat it lost on the Bamburi Cement board in 2011.
This is after the fund increased its stake in the cement firm above the 15 per cent threshold, which guarantees a director’s position.
The fund said on it had forwarded an undisclosed nominee to the cement firm after increasing its stake.
The cap made it difficult for NSSF to have its representative appointed director at Bamburi’s annual general meeting last year after the cement firm dropped Alex Kazongo from its board in March 2011, citing his failure to attend successive meetings. Mr Kazongo is a former managing trustee at NSSF.
But this was made easy by NSSF’s purchase of additional 3.53 million Bamburi shares currently worth Sh735 million, pushing its stake to 16.67 per cent as at April 11 from 14.71 per cent in September last year.
“Bamburi had agreed to give us a seat but by the time of holding the AGM (June 6) we had not agreed on who to send as a representative, which we have since done and will be ratified in the next shareholder meeting,” NSSF managing trustee Tom Odongo told the Business Daily on Monday.
Mr Kazungu used to sit in both boards, which raised questions of conflict of interest and risk of leaking a rival’s business plans.
NSSF’s entry to the board of Bamburi Cement comes as French conglomerate Lafarge continues to tighten its grip on the cement firm with the appointment of three of its executives as directors over the past 14 months.
It brought Thomas Farrell, operations executive vice president at Lafarge, and Catherine Langreney, the CEO of Lafarge Tanzania last year and Daniel Petterson this year, pushing the its representatives on the 10 member board to five, close to its 58.6 per cent ownership in the Nairobi bourse-listed company.
NSSF says it is seeing increased value from the cement maker, especially in terms of dividend payments. It received a dividend cheque of Sh597.4 million from the cement firm this year compared to last year’s Sh533.6 million.
Bamburi’s share has gained 19.3 per cent in the past year to Sh210 at the close of trading on Monday, valuing NSSF’s holding in the cement maker at Sh12.7 billion.
Getting cash to buy new shares was not a problem given that NSSF expected to generate a surplus of Sh10.6 billion in the year to June 2013 compared to a deficit of Sh2.6 billion last year, according to figures presented to Parliament last year by the Treasury.
But it’s only in NBK where it has flexed its muscles in the boardroom. The NSSF quest to acquire more shares in Bamburi is a departure from its position in 2010 when it was keen to reduce its stake.
