Kenya Tea Development Agency Holdings (KTDA) has stopped the plan to make farmers direct shareholders of the company and continue with ownership through tea factories.
The agency’s previous board approved the decision to have farmers become individual investors under a new class of shares called "Tea Farmers" following a special general meeting in April 2021 where the company's Articles of Association were amended to allow the allotment of shares to individual farmers.
However, chairman David Ichoho says the decision was reversed after learning that some individuals wanted to use direct shareholding to control the company.
“We did not approve that because some individuals wanted to use that as a means of controlling KTDA Holdings, so we had to seal that loophole,” said Mr Ichoho.
“Some of the so-called individual shareholders are so wealthy that they would seek the control of the company,” he added.
The farmers were to be allotted five million shares that would have allowed them to earn dividends directly in addition to their entitlements to what their respective tea factories get.
The factories may not distribute the entire dividends to farmers due to the needs such as development projects and settlement of bills.
“There have been no complaints from our farmers and they are comfortable as shareholders of KTDA through their respective factories,” he said.
The previous board was behind the direct shareholding but it was ejected from the office before the certificates were issued to farmers.
KTDA Holdings runs eight subsidiaries.
Through the cancelled direct shareholding plan, farmers would earn a dividend that is due to them based on the green tea supplies to the factories.
