Members of Parliament have expressed concern about a planned private sale of East Africa Portland Cement shares to Kalahari Cement Limited.
The Committee of Trade, Industry and Cooperatives, led by Ikolomani MP Bernard Shinali and Aldai MP Marianne Kitany, said that the transaction is being conducted in the company secretary's office without any consultation with staff or management.
The lawmakers are demanding that due diligence be carried out and that all employees and locals be involved before the transaction can be completed.
“This is not just any private company. Kenyans, through their pensions and taxes, own a majority of this firm. Due diligence must be done, and employees and local communities must be involved,” Kitany said.
Looming Job Loses
East Africa Portland Cement (EAPC) Managing Director, Mohammed Adan, who appeared before the committee confirmed that neither management nor staff had been engaged in the process, warning that this could spark job losses.
“Employees are understandably jittery, because livelihoods are at stake. Human capital is key to our success, and any change of ownership will affect them,” he told MPs.
During the meeting with Adan, the MPs learned that the sale involves 29.2 percent of the company’s authorised shares. Authorised shares are are the maximum number of shares a company is legally permitted to issue to investors.
Share Buyback and Public Participation
If the deal goes through, Kalahari Cement, through its associations with Bamburi, would control 41.7 percent of EAPC.
According to the committee, the sale was being done without the public being involved, adding that the government owns a majority stake in the EAPC through the National Social Security Fund (27percent ) and the National Treasury (25.3percent). This makes the state ownership 52.3 percent of the shares.
The MPs, however, questioned why EAPC could not buy back the shares itself. Funyula MP, Wilberforce Oundo, asked why the company was waiting for Kalahari to purchase the stake, only to consider buying it back later.
According to Adan, a share buyback was possible, citing improved cash flow under a turnaround strategy, but noted that no such proposal had been presented.
“Where there is no public participation, Parliament must exercise its oversight duty. This deal touches on taxpayers, employees, and local communities in quarrying areas, and we cannot allow it to proceed in secrecy,” the MPs warned.
