Senior bosses at the Kenya Tea Development Agency (KTDA) are risking dismissal and prosecution after President Uhuru Kenyatta ordered a probe into alleged illegal operations.
President Kenyatta on Saturday ordered Attorney General Paul Kihara, in an Executive Order, to probe claims of statutory and regulatory violations by KTDA, the largest tea sector player in Kenya.
The Head of State wants allegations of price fixing and abuse of dominance by KTDA, which has seen it tightly control tea farming and sale by more than 620,000 smallholder farmers.
President Kenyatta believes the agency might have violated provisions of the Companies Act and Kenyan laws, and in the process harming smallholder farmers and affecting their crop.
“The Attorney-General is directed to conduct an inquiry into the alleged statutory and regulatory compliance breaches allegedly committed by KTDA and or its directors including potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors’ fiduciary duties and other alleged malfeasances by or within KTDA,” Kenyatta said.
Peter Munya. PHOTO/COURTESY
He called for urgent reforms at KTDA to better align it to interests of smallholder farmers, saying it had allegedly been running “an opaque and exclusionary process” of setting tea prices.
President insinuated that KTDA’s subsidiaries locally and outside the country allegedly engaged in conflicts of interest in tea sales hence going against the interests of tea farmers.
He also ordered the Tea Board of Kenya, one of the institutions set up by the new Tea Act, 2020, to establish mechanisms to enable tea factories conduct their free and fair elections.
KTDA has been opposed to the new regulations pushed by Agriculture CS Peter Munya and even challenged in court the government’s implementation of some of its provisions.
Kenyatta also issued Executive Order Number Two of 2021 on Coffee Sector Reforms after approving the Coffee Bill 2021 for tabling in Parliament to revive the ailing coffee sector.