The Nation (Nairobi)
5 November 2009
Nairobi — Troubled Kenya Planters' Co-operative Union has called for an extraordinary general meeting to decide on the fate of the union that was placed under receivership two weeks ago.
In an advertisement in the press on Thursday, KPCU managing director, Gerald Masila, said the meeting will seek to get a nod for carrying out restructuring and re-organisation of the union.
The meeting to be held on November 26 at its Dandora Complex, could be the turning point for the union, whose directors have resisted change even as it slid deeper into financial trouble.
KPCU was placed under receivership by Kenya Commercial Bank over Sh644 million, and which appointed Deloitte and Consulting Limited as receiver managers.
In 2006, the European Union carried a financial assessment of the union and recommended far-reaching reforms to prevent it collapse.
The union serves 300 coffee societies with 700,000 members, mainly small-scale farmers.
The directors, however, rejected the reforms for what players in the industry term as vested interests.
According to players in the sector, part of the problem is the dual registration of KPCU, as a co-operative under the Societies Act and a limited liability company under the Companies Act.
However, Mr Masila said there was nothing wrong with the dual registration.
This view contrasts with that of the Agriculture minister, William Ruto, who last week said the envisaged Coffee Bill 2009 will strip the union of its dual registration to streamline its operations.
Structures
The EU report had recommended an overhaul of the union's structures to reflect the liberalised market environment, but the directors moved to court when the ministry of Co-operative and Marketing intervened to have the reforms implemented.
The number of directors was to be trimmed to six from 15, while half of the staff was to be laid-off.
Those who remained were also to lose some perks.
KPCU was to concentrate on the core mandate of milling and warehousing, and register any other subsidiary that would operate under separate accounts.
The union recorded a massive Sh299 million loss in 2008, representing a 147 per cent decline, as milling and marketing income dropped to Sh67 million from Sh166 million in 2007.
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