KPCU Management & Board Relations

There have been recent media reports that the KPCU Management has Issued quit notices to the board of directors over disagreements on how to run the company. This press release serves to clarify the true position, for the sake of our clients, industry stakeholders, professional colleagues, families and friends.

1. It is true that on 15th July 2008, the under listed ten senior managers wrote to the board Chairman, raising various concerns which in the view of the management have to be addressed if the normal working relations have to be maintained, and the welfare of the company guaranteed. In the said letter, the said managers offered to step aside to give the board a chance to address the issues raised or take whatever action would be deemed fit in the circumstances. The said managers have thus stayed away from their offices, in view of the gravity of the issues raised.
2. The summary of the matters raised by the Management are that there are serious governance issues that have to be addressed if the company has to survive. We concede that it is impossible for the Management to control the board, and as such the only ultimate option for us is to step aside on principle.
3. The issues of governance at KPCU have been raised before. In January 2007, the Government of Kenya, through the Ministry of Cooperatives Development & Marketing, and with funding from the European Union commissioned an independent study on KPCU, with a view to establishing the major bottlenecks to the company's turn around. Poor corporate governance is one of the major issues highlighted in the said report.
4. In response to the findings of the GoK/EU Report, the Commissioner of Cooperatives, in exercise of his powers under the Cooperative Societies Act, instituted an Inquiry into the workings of KPCU, in order to address some of the problems plaguing the organization. The board of directors sued the Commissioner and obtained an injunction against the intended inquiry. The matter is still pending in court.
5. The Management has in the recent past raised these issues with the Minister for Cooperatives Development & Marketing, with the hope that the relevant interventions can be brought to bear on the KPCU situation.
6. The continued highlighting of the poor governance issues by the Management has as expected elicited strong reactions from some of the board members, and has resulted in situations of stand offs and outright harassment of staff. Obviously, the working environment has become increasingly poisoned and a lot of energy is spent on in-house frictions.
7. We appreciate the view by some of the directors that the Management is not entitled to take the extreme position they have taken, but we invite the relevant stakeholders, particularly the farmers, to interrogate the issues we have raised in writing to both the Chairman of the Board and the Government.
8. A section of the board has reacted to the position taken by Management byway of wild allegations of financial impropriety by the Management. The Management has already sought quotations from two of the top four audit firms in the country, for a thorough, forensic audit of the company's finances for the entire period that the present Management has been in office. It is expected that the audit exercise will be fast-tracked and the findings not only made public but appropriate action taken from its recommendations.
9. We appreciate that this kind of action is not common in the corporate set up, but KPCU as a company has a unique mandate in mobilizing the small scale coffee farmers countrywide, and indeed the organization is a public body owned 100 % by the farmers and a key vehicle towards the realization of the objectives set for the Agricultural sector under the Vision 2030 goals.
10. What is in issue here is not so much about the board of directors or the management and the welfare or survival of either; it is the sanctity of the farmers' sweat and blood, their very hard earned money and wellbeing.
11. For avoidance of doubt, we reiterate that some of the KPCU board members are not fit to hold any public office.
12. It is finally not lost to us that this kind of situation may well mean the end of our tenure at KPCU. If this be the case, we shall unfortunately be compelled to leave, knowing that in the new dispensation of greater accountability in Kenya, each of us must have ideals for which we are ready to fight for. We believe that the interest of the coffee farmer is paramount, and this informs our passion, commitment and willingness to work towards ensuring that the farmers get true value from the coffee business. For us, this is not just a corporate duty, but a calling for which we are willing to make personal sacrifices to see accomplished.

KPCU farmer clients are requested to remain calm until this matter is resolved.

Dated and Signed This 21st Day of JULY, 2008.
Peter N, Kimani - Managing Director
John M, Kanyingi - Financial Controller
Nicholas M.Kahihu - IT Manager
Simon K, Gitonga - Ag. Operations Manager
Nicholas Muteti - Growers Account Manager
Amos N. Kiarie - Legal Officer
Silvestre Okoth - PR & Marketing Manager
Michael M, Kanyuru - Chief Accountant
Simon Daba - Quality Control Manager
Gabriel Nderitu - Snr. Systems Analyst