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Kenya: Tea Farmers Split Over New Voting Mode
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The Nation (Nairobi)
2 May 2008
Posted to the web 1 May 2008
Muchiri Gitonga
Nairobi
Tea farmers are split over adoption of a new system of electing tea factory directors under the Kenya Tea Development Agency management.
The system, which recognises the strength of one's shareholding in voting, will face its first test from May 6 when factories elect a third of their directors. During the polls, founder shareholders will vote according to bonus shares that they hold.
KTDA's corporate communications manager, Mr Charles Kimathi, said the system was part of the proposals by tea farmers to a taskforce whose report was presented to former Agriculture minister, Mr Kipruto arap Kirwa, in August 2007.
Due to the sensitivity of implementing the system, some factory companies have opted to use the old system of one-shareholder-one-vote. The new voting mode is facing opposition mainly from growers with low output but who form the majority of 430,000 smallholder-tea growers under the agency.
Their counterparts have, however, been lobbying for its implementation and are happy that it is finally in place. A farmer's group, the Kenya Union of Small-scale Tea Owners Association, says that the new system is a ploy by KTDA to impose a small clique of individuals to run the factories.
"Majority of small-scale farmers do not have the so-called founder shares and what the KTDA is trying to do is to get a small clique to run the factories," secretary general, Mr George Kinyua, told the Daily Nation.
He claimed that board members had allocated themselves so many of the bonus shares that ordinary tea growers could not match them. Mr Kinyua wondered why the agency was rushing to implement only one recommendation of the taskforce while leaving out others like the reduction of the number of directors from six to three. A KTDA director, Mr Peter Kanyago, said that no farmer would be disenfranchised under the new system. The bonus shares were based on a farmers' 2006/2007 production, he said.
"It is true that one's say will be equivalent to one's stake in the industry. We want to eliminate a situation where farmers with 100 bushes disrupt annual general meetings because they have very little to care about," he said.
Since the industry was liberalised about eight years ago, the shareholders of factory companies have been voting on the basis of one-shareholder-one vote.
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This has been contrary to the company law which stipulates that voting on important matters be done in accordance with shareholders' strength.
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