Economy

Ex-Moi aides block Kenya Seed board hires in court

Seed image

The Kenya Seed Company Eldoret depot. FILE PHOTO | NMG

geraldandae

Summary

  • High Court Judge Stephen Murugu Githinji issued an injunction restricting Kipkorir arap Menjo, Alice Chesire, Francis Okwara, Gitonga Kamiti and Samuel Mecca from assuming directorship.
  • Former managing director of Kenya Seed, Nathaniel Tum, and five other directors applied for the injunction, terming the appointments by Mr Munya as unlawful.

Former associates of the late Daniel arap Moi have blocked the recently appointed directors of Kenya Seed Company from taking office, setting the stage for a protracted war with the government over the management of this key farming agency.

High Court Judge Stephen Murugu Githinji issued an injunction restricting Kipkorir arap Menjo, Alice Chesire, Francis Okwara, Gitonga Kamiti and Samuel Mecca from assuming directorship following their appointment by Agriculture Cabinet secretary Peter Munya in March.

Former managing director of Kenya Seed, Nathaniel Tum, and five other directors applied for the injunction, terming the appointments by Mr Munya as unlawful.

“Pending the hearing and determination of the application herein, there be stay of the first respondent’s decision contained in the Kenya Gazette No.3075 dated March 29, 2021,” Justice Githinji, who sat in Eldoret, said.

When making the appointments, Mr Munya indicated that the term of the previous directors had lapsed, prompting protests by Mr Tum’s team who opted to fight the decision in court.

In court filings, the petitioners argued that Mr Munya’s decision to unilaterally appoint directors of Kenya Seed was in contravention of Article 47 of the Constitution as the CS did not make reference to the company’s memorandum of association.

They argued that the appointment of the board members is a preserve of all shareholders of the Kenya Seed and not the CS.

The petitioners sought the court orders to stay the appointment of the five directors from assuming office, carrying themselves as directors of Kenya Seed, pending determination of the case. The court directed both parties to file written submission within seven days ahead of the mentioning of the case on June 22.

In March this year, the Moi era directors staged a fresh boardroom coup at the company as they raced to wrest control of the firm from the government.

Private shareholders of the seed firm led by Mr Tum summoned an annual shareholder meeting with the intention of appointing new directors, hiring a chief executive and declaring dividends for the past six years.

Mr Tum, Soet Kenya Limited, Paul Kandie and Joseph Otieno are among shareholders who had organised for an annual general meeting (AGM) in April to discuss the replacement of current CEO Azariah Soi whose tenure is ending.

The move triggered a vicious battle with the government, which had insisted the company is majority owned by the State and that the Agriculture ministry has the sole role of tapping its directors and CEO.

Mr Tum was controversially removed as CEO in 2003 following revelations that he had irregularly transferred ownership of the firm to the family of former President Daniel arap Moi.

Over the past 18 years, he has been fighting for control of the seed company in a war that is centred on a 2001 share sale that effectively transferred the parastatal to private hands with minority State ownership.

The battle for control of Kenya Seed has also been in and out of court for years -- including Mr Tum’s 2014 attempt to oust government-appointed directors through a shareholder meeting.

Mr Tum has a 3.89 percent direct stake in the company. Kenya Seed’s troubles started in 2001 after the management under Mr Tum issued new shares and sold to the Moi-era elite in a transaction that diluted government stake from 52.8 percent to 40 percent.

Richard Leakey, who was at that time the head of the Public Service, wrote to Mr Tum, expressing reservations. The Agricultural Development Corporation, the agency that holds the government stake in the seed firm, also opposed the transaction but the Kenya Seed management ignored it.