Lafarge spoils for a fight with State over Portland
Industrialisation PS Wilson Songa. He has claimed Lafarge triggered the current dispute in Portland to negatively affect operations to the benefit of Bamburi. Photo/FILE
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Lafarge Wednesday asked to be enjoined in a suit where Portland is seeking to lift the suspension of its annual general meeting resolutions by the Capital Markets Authority (CMA).
Lafarge reckons the government, which owns a 52 per cent stake in the cement firm, has issued misleading allegations that it was behind the wrangles and that the French firm wants to damage Portland to protect its interests in Bamburi Cement.
The government, which has a 25 per cent direct stake in Portland, teamed up with NSSF (27 per cent) to try to take control of the Nairobi bourse-listed firm’s boardroom that is currently dominated by Lafarge-allied directors.
French multinational Lafarge has sought to fight the State in court over claims that it was behind boardroom wrangles that have hit the East African Portland Cement Company (EAPCC).
The French giant Wednesday asked to be enjoined in a suit where Portland is seeking to lift the suspension of its annual general meeting resolutions by the Capital Markets Authority (CMA).
CMA on December 19 suspended the resolutions, including payment of dividends that is due Monday, confirmation of accounts and appointment of Lafarge representative to the Portland board.
Lafarge reckons the government, which owns a 52 per cent stake in the cement firm, has issued misleading allegations that it was behind the wrangles and that the French firm wants to damage Portland to protect its interests in Bamburi Cement.
Lafarge has a 41.7 per cent interest in EAPCC and owns 58.9 per cent of Bamburi Cement.
Portland has been embroiled in a long and bruising shareholder war that is mainly centred on the government’s determination to have a new team shepherd the cement firm, a move that has been difficult with Lafarge’s upper hand in the board.
“It is necessary that Lafarge be enjoined as an interested party to enable the correct facts concerning Lafarge be put before the court to enable it properly hear and determine all matters in issue in respect of this matter,” says Neil Curtis, Lafarge Group deputy general counsel, in court documents.
Mr Curtis says Lafarge was wrongly accused by Industrialisation PS Wilson Songa who claimed the French conglomerate triggered the current dispute in Portland to negatively affect EAPCC operations to the benefit of Bamburi.
The boardroom undercurrents at Portland burst into the public domain last Tuesday when Dr Songa and NSSF executive Gideon Kyengo stormed out of the shareholders’ meeting and immediately protested to the capital markets regulator over the manner in which the AGM was conducted.
The government, which has a 25 per cent direct stake in Portland, teamed up with NSSF (27 per cent) to try to take control of the Nairobi bourse-listed firm’s boardroom that is currently dominated by Lafarge-allied directors.
At the AGM, all the agenda items were passed through acclamation, a process the majority shareholders said was in breach of good corporate governance rules and the company’s Articles of Association.
The government was said to have preferred voting on the basis of shareholder strength, but Portland reckons in a letter to the Capital Markets Authority (CMA) that the State and NSSF never demanded a poll.
The cement maker says the government’s notice to have former CMC chief executive Bill Lay appointed to the board instead of Lafarge’s representative Didier Tresarrieu and that of increasing the number of directors to 11 from seven was time barred. It reckons that a seven-day notice ahead of the AGM was needed.
This dispute prompted CMA to suspend the shareholder resolutions, leading Portland to move to board.
Wednesday CMA said the Portland directors who moved to court, including its chairman Mark ole Karbolo and company secretary John Maonga, did not have board authority to file the suit.
It warned that the suit is meant to defeat the probe on what transpired at the December 17 AGM and that Portland wants to cripple its regulatory authority.
“This petition is fatally defective and ought to be struck out,” said CMA in court documents.
High Court judge Mumbi Ngugi directed the queries raised by CMA and the State on legality of the suit to be determined on February 4 before Lafarge’s application is considered.
Dr Songa wants Lafarge and its representatives in the EAPCC board — Titus Naikuni (Kenya Airways chief executive) and lawyer Hamish Keith — punished by the competition watchdog for alleged anti-competitive behaviour.
More recently, the Treasury and NSSF have found it difficult to push their agenda through the Portland board because the chairman Mark ole Karbolo and the CEO have been leaning towards Lafarge.
