Gatabaki replaces Naikuni on board of Portland Cement
Mr Kung’u Gatabaki. The former CMA chairman joins the Portland Cement board as one of two new directors. PHOTO | FILE
What you need to know:
Kung’u Gatabaki has joined the Portland Cement board as one of two new directors nominated by the global conglomerate Lafarge.
He takes over from former Kenya Airways CEO Titus Naikuni who held the position for eight years.
Prof Sarone ole Sena, the chairman of the Eldoret University Council, has also joined the East African Portland Cement (EAPCC) board.
The two new directors were appointed in a special board meeting.
Former Capital Markets Authority (CMA) chairman Kung’u Gatabaki has joined the Portland Cement board as one of two new directors nominated by the global conglomerate Lafarge, stepping into the shoes of former Kenya Airways CEO Titus Naikuni who held the position for eight years.
Prof Sarone ole Sena, the chairman of the Eldoret University Council, has also joined the East African Portland Cement (EAPCC) board. The two new directors were appointed in a special board meeting.
They will be expected to help reverse EAPCC’s fortunes, which for the year ended June 30 reported a net loss of Sh386 million.
“The shareholders are together addressing the future of the company and ways to make it more successful,” said EAPCC chairman Bill Lay, who himself was this month re-appointed for a third-year term.
Lafarge owns 41.7 per cent of the Nairobi Securities Exchange-listed cement manufacturer.
The National Social Security Fund owns 27 per cent of the company while the Treasury holds 25 per cent.
Mr Gatabaki, who served as CMA’s chairman from June 2011 to May 31 this year, is joining the board of a company which he is all too familiar with.
He was the chairman of the regulatory body when EAPCC’s shares were suspended from trading at the Nairobi Securities Exchange (NSE) in 2012 following allegations of corporate malpractice.
In December last year, Portland Cement’s management took the regulator to court seeking to lift a suspension of its annual general meeting resolutions following a complaint by government.
But Mr Gatabaki’s past regulatory actions against the company now seem to be water under the bridge, if his appointment is anything to go by.
Portland’s earnings have been hurt by stiff price competition, high staff costs and the weakening shilling. The firm’s administrative costs in the year increased by Sh700 million following a restructuring of its management, staff compensation and an increase in staff gratuity.
It did not pay a dividend to shareholders. The cement producer posted a net profit of Sh1.7 billion in the year to June 2013, before slipping into loss this year.
It will be hoping to tap the long experience of the two new board members to turn around its fortunes.
“The two new independent directors nominated by Lafarge bring with them a wealth of experience from the corporate world,” EAPCC said in a statement.
EAPCC’s performance has also been affected by a protracted power battle between the three main shareholders of the company. Lafarge, which owns 41.7 per cent of EAPCC, also owns a 58.6 per cent stake in rival Bamburi, which is also Kenya’s biggest cement producer.
The government argues that Lafarge’s sizeable shareholding in Bamburi and Portland gives it more than half of Kenya’s cement market and amounts to monopolistic behaviour and undue concentration of economic power.
Lafarge has protested this interpretation. Another point of contention has been the assertion by government that the combined stake of the Treasury and NSSF gives its majority control of the firm.
The NSSF and the Treasury have also accused EAPCC’s management of having cooked the statements of accounts.
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