Mr Joseph Kamotho. The former politician has quit the board of Marshalls. FILE
What you need to know:
Mr Joseph Kamotho and two directors leave as car company is struggling to return to profitability after string of losses.
The company did not give reasons for Mr Kamotho’s exit a year after he joined the car firm’s board, but the former Cabinet minister has been ailing.
Former powerful politician Joseph Kamotho has quit the board of Marshalls East Africa in a shake-up that has led to the exit of three directors.
The company did not give reasons for Mr Kamotho’s exit a year after he joined the car firm’s board, but the former Cabinet minister has been ailing.
His health status hit the headlines during campaigns for the Murang’a senate seat after he was taken ill while addressing a meeting at Ihura Stadium.
Marshalls appointed Harshad Rana as a director with Iqbal Natha and Manish Nair also leaving the firm’s board, marking the latest round of board shakeups at the motor dealer.
The car dealer has shaken up its boardroom at least six times over the past four years, hampering its ability to develop long-term strategies in an increasingly competitive sector.
“The AGM … appointed Mr Harshad Rana to the board and confirmed the retirement of Manish Nair, Iqbal Natha and Joseph Kamotho,” Marshalls said in a notice to the Nairobi Securities Exchange (NSE) on Wednesday.
Analysts had received the entry of Mr Kamotho with surprise. Some said he may have been tapped because of his contacts in the government and the private sector, gained in his 28 years of public service.
Mr Kamotho served as MP and minister for more than two decades, with his last public assignment being as Environment minister in 2002.
A source at the board reckons that the politician has a minority stake in the firm associated with businessman Kamlesh Pattni. The latest board changes have reduced Marshalls directors to six, down from eight.
The remaining directors include Mukesh Vaya and Madhuri Sudan who joined Marshalls board in November last year alongside Mr Kamotho.
They had replaced four directors; Mombasa tycoon Ali Punjani, James Ogato, Kenneth Masika and Hisam Khan who were appointed on March 31, 2010 after Mr Pattni secured control of the company’s board from rival Ketan Somaia.
The November 2012 board changes came just before Mr Pattni’s investment vehicle, Marshalls Investments, disappeared from the list of top shareholders.
Marshalls’ boardroom has changed several times over the past few years, mainly due to ownership disputes between Mr Pattni and Mr Somaia which was resolved in 2010.
The boardroom shake-ups come as the listed company is struggling to return to profitability since losing the flagship Peugeot franchise in 2007.
The new board is expected to shepherd it back to profitability by expanding its product line and improving sales of its current franchise KIA.
The firm continued its loss-making streak in the year ended March on reduced car sales, which has seen it lose market share.
Marshalls made a net loss of Sh110 million in the period compared to Sh165.5 million a year earlier, with the reduced losses linked to a lighter debt burden. It has been losing market in an industry dominated by General Motors and Toyota.
Sales dipped by 1.7 per cent to Sh230.4 million from Sh234.3 million last year and Sh1.3 billion in 2007—highlighting the troubles facing the firm and extending its loss-making streak to six years.
Its share price has shed 17 per cent in the past year to stand at Sh14 on what stock brokers attribute to low trading.
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