Court blocks Kibaki from appointing Portland chairman

The battle for control of East Africa Portland Cement Company (EAPCC) took a fresh twist when the High Court blocked the appointment of a new chairman, pending a ruling on March 16.

Judge Mohammed Warsame on wednesday suspended the gazette notice on the appointment of Isaac Mpapuluu ole Mapenay and the sacking of Mark ole Karbolo until a ruling is made to determine whether the cement manufacturer is a state corporation.

In an urgent application lodged at the High Court in Nairobi on Tuesday, Mr Karbolo wanted the decision by President Kibaki to sack him suspended saying it was against interim orders issued by a constitutional court on January 19 reinstating directors ousted from the firm in December.

“I am inclined to grant the orders sought,” said Mr Warsame. “My understanding is that the essence of this application is to preserve the substratum of the pending matter.”

Trouble at the cement firm started on December 22 when Industrialisation minister Amason Kingi fired directors over procurement flaws.

But Mr Karbolo, managing director Kephar Tande, Titus Naikuni (Kenya Airways CEO), and lawyer Hamish Keith went to court to block the move.

Probe

The minister said his action was aimed at clearing the ground for investigations into alleged fraud estimated to have cost the firm Sh1 billion.

The directors hit back saying the minister had no authority to suspend them because the company had ceased to be state owned.
Mr Kibaki said he had made the appointment in exercise of powers conferred to him by the State Corporations Act, affirming the view that Portland is a state-owned company.

Legal experts said Mr Kibaki’s latest action was in contempt of court orders and out of tune with Attorney-General Githu Muigai’s position that EAPCC is a private company and its directors should therefore be removed during extraordinary and annual general meetings.

In a legal position offered at the height of the crisis at the cement firm, Prof Muigai said that neither the government nor state-controlled NSSF had controlling rights needed for the cement firm to be a parastatal.

He argued that Portland Cement can only be run as a state corporation if shares of both NSSF (27 per cent) and Treasury (25.3 per cent) are treated as a single entity. State lawyers have insisted that EAPCC is a state corporation, arguing that stakes held by Treasury and NSSF are practically controlled by the government.

Evans Monari, a partner at Daly & Figgis, the law firm that is representing Mr Karbolo and three other directors in the Portland cement board, termed the president’s move illegal.

“What has happened is brazen contempt of the authority and powers of the court,” said Mr Monari on Wednesday.