Ksh 21b loss query at KTDA as two senators ask DCI to probe tea agency

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Director of Criminal Investigations (DCI) boss George Kinoti. PHOTO/COURTESY

By DAVID RONO

Nyeri and Kericho senators have written to the Director of Criminal Investigations (DCI) to investigate the Kenya Tea Development Agency (KTDA) following reports it lost Sh 21 billion following the collapse of Chase and Imperial banks.

In a letter dated October 22, Senators Ephrahim Maina and Aaron Cheruyoit also want the DCI to investigate the general conduct of KTDA following complaints from tea farmers.

“We invite your good office to investigate the claim of Sh 21 billion lost following the collapse of Chase and Imperial banks as well as the general conduct of KTDA,” the the letter says in part.

The two Senators added that the DCI investigations should commence as they await for the implementation of the report of the Ad-hoc committee on tea which among other recommendations proposed for the formation of a Commission of Inquiry to probe the operations of KTDA.

They also wanted KTDA investigated following complaints from tea farmers over the alleged hoarding of their earnings commonly referred to as bonus by KTDA and its subsidiaries.

Tea farmers have been complaining that they are being double-charged by KTDA for different services rendered to them by the agency’s subsidiaries.

A special investigation contained in the Tea Industry Status Report shows that tea farmers are being double-charged through warehousing, brokerage, marketing, value addition and management fees.

The report says that Chai Trading Company Ltd a KTDA subsidiary that provides warehousing services charges tea farmers warehousing fees ‘yet technically the farmers own the warehouses’.

The report reveals that Chai Trading Company Ltd charges farmers 0.5 percent of total value of tea sold by farmers as brokerage fees, yet KTDA Holdings Ltd charges them 2.5 percent total value of tea sold for all management activities including marketing which is a KTDA mandate.

A farmer picking tea in Meru. PHOTO/COURTESY

“KTDA has a fully fledged marketing department. Apart from conflict of interest, this is double charging the farmer for services that could have been conducted by one entity. The broker Chai Trading Company Ltd is also paid 0.75 percent from the buyer and 0.5 percent from the producer of the same tea sold making a total of 1.25 percent,” the report notes.

Tea farmers from different parts of the country also want the system for electing directors of the KTDA changed saying it discriminates some parts of the country.

The farmers argue that the current system of electing KTDA directors is lopsided as it favours areas with more tea factories.

“We want this system changed so as it can stop giving incumbent KTDA directors an advantage,” Mr Seth Ruto from Kericho said.

In November last year, more than 600,000 tea farmers participated in the polls to elect new directors for the 54 Tea factories managed by KTDA Management Services Limited. In 37 electoral areas, candidates went in unopposed.

The annual elections were conducted in 106 electoral areas of the 53 tea factory companies, with shareholders of each factory required to elect two of six directors who are on rotation.

The tea farmers elect one-third of factory company directors on rotation and the candidates are subject to the nomination process according to Company Act 2015.

The annual poll is part of the factory corporate governance process that requires shareholders to elect representatives to their boards.

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