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Economy

KPCU defies court in Sh391m fired staff case three years on

The entrance to KPCU offices at Wakulima House in Nairobi
The entrance to KPCU offices at Wakulima House in Nairobi. FILE PHOTO | NMG 

Cash-strapped Kenya Planters Co-operative Union (KPCU) is yet to pay retrenched workers Sh391.6 million in salary dues three years after a court ordered it to outline its plan for clearing the arrears.

A report tabled before the National Assembly Committee on Trade shows further that the farmers’ union has failed to compensate the retrenched staff as it crumbles under a Sh825.6 million debt.

In 2016, 113 retrenched employees sought orders from Employment and Labour relations court to compel the KPCU directors to deposit Sh249.8 million in court to cater for their terminal payments before the former coffee giant miller’s assets are depleted.

The farmers said they were axed without notice and payment of terminal dues by Deloitte that the KCB Group picked to oversee operations at the debt-ridden firm over a defaulted a Sh700 million loan.

“The current book value of the liabilities stand at Sh825.6 million … the amount owed to staff in the form of terminal dues is Sh391.6 million,” reads part of the report.

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The debt-ridden firm’s outstanding loan balance at KCB Group is Sh203.1 million, followed by legal fees at Sh93.2 million and a further Sh68.1 million in unpaid dues to coffee farmers.

The KPCU has Sh64.3 million in unremitted statutory deductions that include pay-as-you-earn and pension, underlining its financial distress.

In July, President Uhuru Kenyatta ordered the restructuring of the KPCU and the State picked four officials a month later to oversee an independent assessment of its financial health kick-starting the liquidation process set to complete by early next year.

Trade and Industrialisation Cabinet Secretary Peter Munya said the State decided to liquidate KPCU owing to corruption and failure to comply with the provisions of the Co-operatives Act on proper management of coffee farmers’ assets.

Liquidation of the once giant farmers’ union comes amid allegations by MPs that KPCU directors oversaw the sale of 857 acres of land under Kahonoki Coffee Estate, claims that Mr Munya denied.

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