A few weeks ago, Kakuzi Limited, listed on both the Kenyan and London Stock Exchanges, held its Annual General Meeting. At that fairly acrimonious meeting, in spite of the majority shareholders present voting against a proposal to sell the Siret Tea Estate and Factory (to a company in which the Directors of Kakuzi have interest), the proposal was nevertheless pushed through by the few supporters but majority shareholders present.
Siret Tea Estate is the jewel in Kakuzi's crown and the sale of this asset shall substantially depreciate the overall value of Kakuzi.
It is also interesting to note that the Capital Markets Authority has indicated that it shall not interfere with the sale of the asset.
Section 11(1)(d) provides that one of the main objectives of the Authority is the protection of investor interests....which of course includes minority shareholders.
Undoubtedly, the propertiership of Kakuzi in Siret Tea Estate attracted investors to purchase its equity. The minority shareholders had not envisaged that the majority shareholders would thereafter sell of the major asset of the company to a company owned by its Directors.
Is this not sufficient reason for the Capital Markets Authority to provide substantive direction?
Nevertheless, Kakuzi has declared that the allegation that its Directors are seeking to benefit from the sale of the Siret Tea Estate is scurrilous and completely unfounded.
At the end of the day, Kakuzi shareholders themselves have an obligation to establish the factual position, as they would be the losers at the end of the day!
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