KENYA – Individual smallholder tea farmers affiliated with the Kenya Tea Development Agency Holdings PLC (KTDA Holdings PLC) will now own direct shareholding of the company alongside their respective 54 tea factory companies, further cementing their ownership and proprietorship in the organisation.
This comes after KTDA shareholders amended the company’s Articles of Association to enable the allotment of the company’s shares to individual farmers under a new category of shareholders known as “Tea Farmers.”
Each of the 54 Tea Factory Companies, through their respective portions of their 5 million bonus share issue, assigned their shares to their tea farmers, completing the passage to having the tea farmers become direct owners in KTDA Holdings PLC, reports Citizen News.
The farmers were assigned the shares as ordinary shares, based on the leaf delivery supplied between July 1, 2019, and June 30, 2020.
The tea farmers will now be direct beneficiaries of dividends from the profits of KTDA Holdings PLC derived from its income and that of its subsidiaries.
To this end, they will now collectively own 5 million ordinary shares, with the Factory Companies where the same tea farmers are shareholders holding 24 million ordinary shares in KTDA Holdings PLC.
Among the new tea farmer category are hundreds of institutions registered as tea farmers and supply leaf to their factories, spread out in all the 12 KTDA zones in 17 counties in the country.
The farmers approved the future passage of the listing of KTDA in the Nairobi Securities Exchange.
The institutions include Catholic Churches, PCEA Churches, AIPCA Churches, AIC Churches, FPFK Churches, AGC Churches, SDA Churches, Secondary Schools, Primary Schools, a Seminary, Mission Hospitals, Self Help Groups, Cooperative Societies, Nyayo Tea Zone Corporation, Prisons Department, University of Kabianga and several companies.
These institutions join the 620,000 plus individual tea farmers spread out in the said locations.
Amongst the new changes include a seat on the board of KTDA Holdings directly elected by the shareholders at the company’s Annual General Meeting.
The farmers would be elected on one term, three-year basis from one of the 12 zones, which will rotate amongst them. The farmer director representative will sit alongside the directors elected to represent the factory companies from the zones.
Other significant changes to the company articles passed by the shareholders include voting for all company directors on the floor at the Annual General Meetings.
This new process does away from the previous nomination where only directors of factories in a zone were involved in the zonal nomination exercises.
The company adopted a directors’ election process similar to companies under the Capital Markets Authority, where elections are carried out on the floor of the AGM.
Other significant changes to the articles include the requirement that shareholders must approve any disposal of company property exceeding the value of one percent (1%) of the value of the total value of KTDA Holdings PLC.
This safeguard’s the shareholders property and would require full explanation at a General Meeting for any disposals of such kind.
To further protect the farmer from unscrupulous share buyers, the shareholders locked the tradability of the allotted shares for ten years. This practice has previously been done by other institutions to safeguard shareholders’ interests.
The shareholders also approved the future passage of the listing of KTDA in the Nairobi Securities Exchange.
The amendments follow the government proposing new policy regulatory and administrative framework to reenergize the ailing tea sector in the country.
