Small investors join Portland row as State aims at board secretary [Nation (Kenya)]
(Nation (Kenya) Via Acquire Media NewsEdge) Minority investors of Portland Cement have joined the row pitting the French conglomerate Lafarge and the Kenya government, which has called for the firm's company secretary to be punished.
Daniel Kimotho, a representative of the small shareholders, said on Monday that the vicious fight for control of East African Portland Cement Company (EAPCC) will hit hard the minority investors who have a six per cent stake.
He accused the government and the National Social Security Fund (NSSF) of triggering the fight that has sucked in the competition watchdog and the capital markets regulator.
"The consequences of their actions are geared towards bringing down the company and not caring for the interest of the minority shareholders," said Mr Kimotho at a Press conference on Monday, adding that the State should allow elected directors to run the cement firm.
The State which owns 25 per cent of Portland has teamed up with NSSF (with 27 per cent) to take control of the firm's boardroom, dominated by Lafarge-allied directors.
The boardroom undercurrents at Portland burst to the public domain last Tuesday when Industrialisation PS Wilson Songa and NSSF executive Gideon Kyengo stormed out of the shareholders' meeting and immediately protested to the capital markets regulator on the manner in which the AGM was conducted.
All the agenda items were passed through acclamation—a process the majority shareholders said was in breach of good corporate governance rules and the company's Articles of Association.
READ: CMA moves to probe Portland after chaotic AGM
The government was said to have preferred voting on the basis of shareholder strength, but Portland reckons in a letter to the Capital Markets Authority (CMA) that the State and NSSF never demanded a poll.
The Nairobi bourse-listed firm says that the State's notice to have former CMC chief executive Bill Lay appointed to the board instead of Lafarge's representative Didier Tresarrieu and that of increasing the number of directors to 11 from seven was time barred. It reckons that a seven-day notice ahead of the AGM was needed.
This has prompted Dr Songa to petition the Institute of Certified Public Secretaries of Kenya to punish their member John Maonga, EAPCC's company secretary.
"I have been provided with a copy of the enclosed letter from Mr Maonga to the CMA; Mr Maonga confirms there was no demand for a poll. Such an assertion is unfounded, unethical and a blatant untruth," said the PS in a letter to the institute.
"We request that the institute investigates this matter and take appropriate action against the company secretary in respect of his unethical and illegal behaviour."
Portland has been embroiled in a long and bruising shareholder war that is mainly centred around the government's determination to have a new team shepherd the cement firm—a move that has been difficult with Lafarge's upper hand in the board.
Dr Songa last week in a letter to the Competition Authority of Kenya sensationally accused Lafarge of seeking to damage EAPCC to protect its interest in Bamburi Cement.
The PS wants Lafarge and its representatives in the board of EAPCC—Titus Naikuni (Kenya Airways chief executive) and lawyer Hamish Keith—punished for alleged anti-competitive behaviour.
READ: State takes Lafarge to the competition chief in Portland row
Lafarge has a 41.7 per cent interest in Portland Cement and owns 58.9 per cent of Bamburi Cement.
The State and NSSF allege that EAPCC is 'in the red' and that the company's management had cooked the statement of accounts.
The cement maker posted a net profit of Sh1.77 billion for the year to June compared to a loss of Sh972 million in the same period a year earlier.
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