His Excellency the President issued Executive Order No. 3 of 2021 on Friday 12th March 2021 on revitalization of the tea sub-sector. H.E. the President noted:
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That the tea sub-sector has been experiencing challenges particularly with regard to diminishing earnings to tea farmers;
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That the management of the smallholder sub-sector is currently vested in KTDA who manage sixty-nine (69) smallholder tea factories which accounts for approximately 60% of tea production in Kenya;
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That the problems in the tea sub-sector are partly attributable to the performance of KTDA which is negatively affecting both the tea sub-sector and the Kenya economy as a whole;
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That in the conduct of its business, KTDA may have in some instances acted contrary to applicable Kenyan laws including the Company’s Act as well as acting against the interest of smallholder tea farmers; and
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That there is compelling public interest for the government to intervene to secure the interests of Kenya smallholder tea farmers and further the national good by embedding the ethos of good governance in the management of the tea sub-sector.
In order to address the above challenges, H.E. the President gave several directives to be undertaken by the Cabinet Secretary for Interior and Coordination of National Government, the Cabinet Secretary for Agriculture, Livestock, Fisheries and Co-operatives, the Attorney General and the Tea Board of Kenya.
Key among the directives is that the newly established Tea Board of Kenya should jointly with other stakeholders and in compliance with all applicable procedural requirements sanction immediate elections in all tea factories so as to enable tea farmers to freely elect their Board members within sixty (60) days from the date of the Executive Order with the objective of securing a transparently managed tea sub-sector.
As you are aware, smallholder tea factories are limited liability companies owned by smallholder tea farmers through shares. The Board members are therefore elected and appointed during the Annual General Meetings in accordance with the applicable laws and their respective Memorandum and Articles of Association. Tea factories are required to hold each year an Annual General Meeting (AGM) in addition to any other meetings in the year. An AGM should be held before 15 months lapse after the preceding meeting and that of the next.
The Ministry of Agriculture has received petitions from tea farmers from various tea factories indicating that more than fifteen months have elapsed from the date of their last Annual General Meeting and no new directors have therefore been elected or confirmed into office to replace those who have retired through rotation. Consequently, since the quorum for the Board of tea factories is four, the Boards are in limbo and cannot form a quorum to conduct business including convening general meetings for the tea factories.
Under the Memorandum and Articles of Association, any two members of the tea factories can convene an Extraordinary General Meeting in the same manner as nearly as possible as the meeting may be convened by the Board where there are no sufficient directors within Kenya capable of acting to form a quorum.
Tea farmers from several tea factories have therefore issued requisite notices for Extraordinary General Meetings under the provisions of their respective Memorandum and Articles of Associations to discuss governance matters, the current status of their factory Boards and election of directors.
Tea farmers have further requested the government to facilitate their extraordinary general meetings by providing the necessary security.
Towards preparations for the scheduled elections, tea farmers should ensure that they issue the requisite notices and conduct their extraordinary general meetings in line with their respective Memorandum and Articles of Association.
In order to facilitate the tea farmers’ meetings and in line with the Executive Order issued by the President on Friday 12th March 2021, I hereby issue the attached timetable to enable tea farmers plan and hold their meetings. Tea farmers should ensure that they issue the requisite notices and conduct their Extraordinary General Meetings in line with their respective Memorandum and Articles of Association.
Tea farmers should notify the Ministry of Agriculture, Livestock, Fisheries and Co-operatives, Ministry of Interior and Coordination of National Government, the Attorney General, the Tea Board of Kenya and the local security agencies of the time and venues of the extraordinary general meetings to enable the government provide the necessary support for the meetings.
Hon. Peter Munya, EGH,
Cabinet Secretary for Agriculture, Livestock, Fisheries and
Co-operatives
