The East African Portland Cement Company (EAPCC) has moved to court accusing the Treasury of seeking to impose a member on its Board.
Treasury building, Nairobi
According to papers filed in court, the nomination of William Lay, a former CMC chief executive to the board was done after the deadline for nominations had passed and was therefore a contravention of the board rules.
Despite the illegality, the company claims that the Treasury, through its representative, William Songa, insisted that the nomination process had to proceed. Songa is the Industrialisation principal secretary.
The representative of the Attorney General, Gideon Kyengo is also claimed in the petition to have supported the nomination of Lay.
“The two, brazenly told the board that they intended to proceed with the election of the proposed director together with the increase of the directorship from seven to eleven notwithstanding the illegality,” the company states in its suit.
Also under fire is the Capital Market Authority (CMA), which has been accused of seeking to paralyse the operations of the cement manufacturer by blocking the adoption of various resolutions passed by the shareholders during the company’s AGM.
The cement manufacturer claims that the markets regulator, acting on the advice of the AG and the National Social Security Fund (NSSF) issued instructions that the resolutions by the Annual General Meeting (AGM) be suspended.
The NSSF, together with the Treasury jointly own 52 per cent of the cement company. Among the resolutions that the regulator is claimed to have attempted to block was the approval of financial statements of the company and the payment of dividends to shareholders. According to the petition, the Treasury through its nominee had, during the AGM claimed that the figures in the financial statement were inaccurate.
Suspension of resolutions
The company wants the court to intervene in the matter arguing that the suspension of the resolutions passed by the shareholders was prejudicial to their interests.
It is seeking court orders suspending the decision of CMA to stop the company from implementing the resolutions of the AGM.
“The illegal actions by the Capital Markets Authority may interfere with the operations of the company by suspending it from the Nairobi Securities Exchange on allegations of nonexistent breaches, regarding the conduct of the Annual General meeting,” the company says in the petition.
During yesterday’s proceedings, parties to the suit agreed to maintain the status quo until January 15, when the case will come up for further directions.
Two weeks ago, the Capital Markets Authority announced it has launched investigations into claims of creative accounting and breach of corporate governance rules during the East African Portland Cement Company annual general meeting.
The markets regulator said that it had received a protest letter from the Treasury and the National Social Security Fund seeking to nullify all the resolutions passed at the AGM.
By WILFRED AYAGA, The Standard
