More than 10, 000 shareholders of Limuru Milk Processor have protested against the leasing of the factory to Molo Milk over a Sh200 million debt. They said the 10-year lease has created uncertainty on the fate of farmers, the company's assets and future. The shareholders have accused directors of mismanaging the milk firm and being secretive in the lease deal, adding that they expect the directors to disclose the information on the company's debts during a special general meeting on September 28.
Some farmers have claimed the company is hiring lorries to transport milk after selling its own. A source said 20 casual workers and three permanent staff have been sacked for allegedly divulging sensitive information on the factory to the public. Another 90 permanent workers will know their fate this week.
Other sources said the factory, which is 70 per cent owned by the Limuru Dairy Farmers Cooperative Society has been mismanaged by the nine directs - five are sacco nominees while four represent the independent shareholders with a 30 per cent stake. A staffer, who has been at the company for 10 years, said the factory has for a while terminated the production of ghee, butter and yogurt and Lala, adding that it only produces small quantities of fresh milk.
"The company cannot produce anything now apart from the fresh milk and as a result some of the workers have been laid off," said the worker, who declined to named for fear of victimisation. Meanwhile, Limuru MP Peter Mwathi has said corruption is to blame for the milk processor's woes. He criticised the directors for keeping the company's shareholders in the dark over the lease deal, adding that their actions are suspect.
Mwathi said the lease stipulates that Molo Milk will be paying Sh4 million monthly to the Limuru company for 10 years. He said the directors have received a down payment of Sh50 million for the lease to allegedly pay debts. Efforts to get comment from the general manager Stephen Kibatha were futile as his phone went unanswered. However, Mwathi said Kibatha had told him that the directors reached a "rational decision to give up the factory".
The MP vowed to fight to protect the farmers' interests and ensure that the milk firm does not collapse as a result of the debts. He said he has asked the Ethics and Anti Corruption Commission to investigate the matter, adding that he will go to court to block the takeover of the firm until the shareholders reach a consensus on the deal. "I am calling on EACC to investigate the sale of company vehicles, the debts and the term of the lease agreement," said Mwathi.
He said a meeting called by directors for three farmers representatives from each of the 24 sub-locations in the district on September 22 is aimed to coercing the shareholders to endorse the lease deal in the September 28 AGM. "The shareholders are furious and I am shocked that there is a meeting on 22 before the special AGM between the directors and farmers representatives three from each of the 24 sub locations from the district who will be used to convince the members to accept the deal."
He said that if the new company took over, as according to what Kibatha told him they would continue using the LMP brand name. He said that Kibatha further claimed that the products would be for Molo which is well known in the media with the slogan 'usiseme maziwa, sema ngo'ombe'.
He said that Limuru farmers would not benefit as, most of the milk will come from Rift valley. "Molo Milk was in the media recently saying that they have surplus milk and therefore they are looking for a factory to process the milk. That means, the Limuru farmers will be rendered useless and dairy farming is their livelihood," said Mwathi.