GREATER CONTROL

Farmers to have seat at KTDA Holdings Board, agency clarifies

Farmers will derive dividends directly; being earnings from KTDA Holdings.

In Summary

• Tea factory companies will remain corporate shareholders owning 23,000,000 shares and will now jointly and directly own the company with the farmers.

• Additionally, trading or sale of the shares will be locked for the next ten years to protect the farmers from short-term speculators.

Farmers picking tea in Kangaita village
'TEA IS AN INVESTMENT': Farmers picking tea in Kangaita village
Image: FILE

KTDA has said that farmers will now have greater control over their assets worth more than Sh36 billion following restructure in its shareholding structure.

In a clarification communication on Monday, the agency said that the restructuring has made KTDA Holdings PLC one of Kenya's largest companies by shareholding as it will now have over 620,000 individual and institutional shareholders.

It said that previously, farmers owned the organisation 100 per cent through their 54 tea factory companies whose zonal representatives formed the KTDA Holdings Board at the national level.

Tea factory companies will remain corporate shareholders owning 23,000,000 shares and will now jointly and directly own the company with the farmers who will now also own 5,000,000 shares.

Hence, farmers will have a seat at the KTDA Holdings Board, with the farmer representative from each of the 12 Zones holding the position for a three-year non-renewable term.

Also, farmers will still have the final say on the affairs of their investment through the majority shareholding by the 54 corporate shareholders, the tea factory companies which are 100 per cent owned by respective tea farmers.

“As part of the resolutions, the sale of any assets whose value exceeds one per cent of the total value of KTDA Holdings PLC net value will have to be approved by the shareholders/farmers,” KTDA said.

Additionally, trading or sale of the shares will be locked for the next 10 years to protect the farmers from short-term speculators.

Further, farmers will derive dividends directly; being earnings from KTDA Holdings and its subsidiaries in addition to earning dividends through their factories.

“These new changes mean that KTDA shareholders can, in the future if they so wish, approve listing shares on the NSE allowing the company to raise additional funds for development expenditure, as opposed to its current framework where funds are raised through internal mechanisms.”