Kenya Planters’ Co-operative Union headquarters in Nairobi. Photo/FILE
By WACHIRA KANG’ARUPosted Wednesday, November 11 2009 at 19:09
Troubled Kenya Planters’ Co-operative Union has halted operations after running out of funds to keep it on its feet.
The once giant miller, consequently, sent home all its staff and suspended selling of coffee at the Nairobi Coffee Exchange auction leaving millions of farmers uncertain of what will happen to their produce.
The union was last month placed under receivership by the KCB Group over a Sh644 million debt in a move that effectively cut management’s access to the bank accounts and by extension, an avenue to withdraw money for its operations.
Curtailed access
Deloitte Consulting Ltd was appointed receiver managers.
“This has curtailed our access to funds that would cater even for the most basic operational requirements for business continuity,” a statement sent to the press on Wednesday read.
KPCU human resource and administration manager James Munyi signed the release.
And in what could inflict more damage to KPCU survival, a rival union formed to take its place said it is gaining momentum.
Speaking to Daily Nation in Muranga, Mugama Farmers’ Co-operative Union deputy managing director Joseph Kariuki said he was optimistic that farmers would benefit from their new partnership with the newly created Kenya Coffee Co-operative Exporters Limited (KCCE).
“Before, there was no transparency in marketing; what made us contract KCCE is because we want transparency. We have seen our new partner can be trusted,” said Mr Kariuki.
However, speaking to the Daily Nation KPCU managing director Gerald Masila said the union and the government are finalising a rescue package.
“The details will be announced in the course of the week,” he said.
Vowed to fight
The union’s board of directors has, however, vowed to fight to rescue the union from the machinations of “those who have been heard to loudly boast and vow that KPCU must die.”
Workers are expected to return to work at the end of the month by which time the suspended board of directors hopes to have resolved its woes with bankers.
“The issues in dispute between us and the bank are not beyond resolution and as an organisation, we are pursuing all available options towards ensuring that the problem is fully and amicably addressed,” the statement further read.
One of the options that the board is pursuing is the hope that the government will move in to its rescue.
“We are working closely with KCB to ensure that the receivership does not take any adverse direction that could end up hurting farmers,” PS Ministry of Co-operative and Marketing Seno Nyakenyanya said in telephone interview.
Farmers have been invited for an extraordinary general meeting on November 26 where they are expected to pass “crucial resolutions that will set the platform for earnest reforms of the company.”
Meanwhile, the High Court on Wednesday heard that no meaningful talks have been made between troubled KPCU and Kenya Commercial Bank.
And because the parties were not likely to reach an agreement on the way forward, the union wants the court to temporarily stop the receiver managers from taking over the control of the miller.
Additional reporting by James Ngunjiri and Sam Kiplagat
Source: Daily Nation
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