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Murang’a tea factory to kick out Sasini MD from board

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From left: Sasini Tea MD Stephen Githiga, his Barclays Bank Kenya counterpart Jeremy Awori and Barclays Bank Africa managing executive, Wealth Investment and Insurance Lanz Zulu during a past event. FILE PHOTO | NMG

Shareholders of Kiru Tea Factory Company will Monday morning meet to kick out managing director of listed firm Sasini Tea #ticker:SASN from the Kiru board for conflict of interest.

The factory has invited its shareholders to an extra ordinary meeting whose main agenda is to oust Stephen Githiga, the Group MD of Sasini, who unsuccessfully sought the High Court’s help to remain a director of Kiru.

Kiru says Mr Githiga’s position in the factory became invalid after he was hired by Sasini in January last year, arguing that he cannot sit on the boards of two rival firms.

The High Court last month ruled that director fights should be settled by the tea factory.

“Pursuant to Section 139 (1) of the Companies Act, 2015, Stephen Maina Githiga is hereby removed as a director of Kiru Tea Factory Company Limited, before the end of his term in office, having been found in breach of Section 143 (1), Section 146 (1) and Section 147 (1) of the Companies Act, 2015,” reads the shareholder meeting notice dated February 2.

The sections bar a director from having interests that may be in conflict with the firm he is serving and outlaws accepting a benefit from a third party on the strength of his board position.

READ: Sasini taps insurance man Stephen Githiga as new MD

Before his Sasini appointment, Mr Githiga’s was serving as director of Kiru, which is managed by the Kenya Tea Development Agency.

The tea factory said the breach of the company law and the conflict of interest are enough grounds to remove him and paved the way for his suspension in May.

Mr Githiga, however, moved to court when he learnt of the ouster bid, claiming he has been denied the right to be heard and that the process leading to his suspension was flawed.

The court in its ruling said since running of the company is bestowed upon the board, it was cautious about delving into such conflicts.

The judge said Kiru’s Articles and Companies Act provide an elaborate process on the removal of a director, noting that Mr Githaiga moved to court even before the internal process is complete.