Detectives last week raided the Kenya Tea Development Agency (KTDA) headquarters in Nairobi as well as the Mombasa Auction, even as squabbles in the tea sector escalate.
In a statement issued on Friday, KTDA failed to reveal much about the raid, terming the sleuths as “individuals who presented themselves as police officers”.
Kahawa Tungu understands that while the raid happened in Nairobi, another batch of sleuths were probing the East Africa Tea Traders Association (Eatta) offices in Mombasa.
The raid followed a Presidential directive to the Office of the Attorney General to investigate alleged statutory and regulatory compliance breaches committed by KTDA and its directors.
“Empirical evidence abounds; as a result of poor corporate governance, farmers who would be earning about Sh91 per kilo for their tea, are currently earning about Sh41 with Sh50 per kilo going to brokers and middlemen,” said President Kenyatta in a Presidential address in 2019.
The President’s directive pointed to a potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors’ fiduciary duties.
The raid in Nairobi saw four IT officials detained, while other staffers were released at 8pm and ordered to leave their drawers open.
The probe comes at a time the government is engaged in a tussle with a section of farmers over elections that were also ordered by the President.
“It is clear the governance of KTDA and entire marketing of tea will require to be restructured if we are to assure our tea farmers get more revenue from their tea sales,” said the President.
President Kenyatta issued the directive to hold elections in all the KTDA factories within 60 days, on March 12, 2021.
The current management however moved to court and obtained an injunction stopping the polls.
Also, the current management is seeking a Ksh1.7 billion loan from commercial banks, whose use has not yet been specified.
The loan will add to Ksh5.64 billion that was in existence as of June 2020. In 2019, KTDA had an outstanding loan balance of Ksh4.45 billion.