Treasury ‘will not fund De La Rue purchase’

The Treasury will not fund the purchase of a 40 per cent stake in currency printer De La Rue and has declined to factor in the Sh700 million required for it in the 2012/13 Budget.

The request had been made earlier in the year, but failed to get a go-ahead from top Finance ministry officials. The ministry is the custodian of shareholdings in public and private enterprises on behalf of the government.

De La Rue has threatened to pull out of Kenya if it is not awarded a 10-year contract to print local currency.

READ: De La Rue to shut plant unless CBK gives it 10-year deal

The Treasury, through the investment secretary, had considered a possible investment in the firm amounting to 40 per cent of the company’s shareholding — giving the company a value of Sh1.75 billion.

But this could only happen on condition that the Central Bank of Kenya agreed to a 10-year contract to print the currency, thereby justifying the continued presence of the Ruaraka-based plant in Kenya.

“On De La Rue, we did not factor any funds into the budget ,” Dr Geoffrey Mwau, the economic secretary at the Treasury told Business Daily.

CBK governor Njuguna Ndung’u said he could not answer queries on the implications of the Treasury’s refusal to acquire shareholding saying it was an issue for the Finance ministry.

“I cannot answer any questions on De La Rue. It concerns the Ministry of Finance,” Prof Ndung’u said on Monday.

During investigations by the Parliament’s Public Accounts Committee (PAC) Prof Ndung’u denied knowledge of an agreement on the joint venture between the government and De La Rue, saying the acquisition of a 40 per cent stake in the firm was being negotiated with the Treasury.