The individual smallholder tea farmers affiliated with the Kenya Tea Development Agency holdings plc (KTDA) will now own direct shareholding of the company alongside their respective 54 tea factory companies to cement their ownership and proprietorship in the organization.
This flows the resolutions of the KTDA shareholders, at a special general meeting (SGM) held in April this to amend the company’s articles of association.
It is meant to enable the allotment of the company’s shares to individual farmers under a new category of shareholders known as “tea farmers.”
Under changes described as a significant milestone in the governance of the Kenyan smallholder tea industry, each of the 54 tea factory companies, through their respective portions of their 5 million bonus share issue, assigned their shares to their tea farmers, completing the passage to having the tea farmers become direct owners in KTDA.
The farmers were assigned the shares as ordinary shares, based on the leaf delivery supplied between July 1, 2019, and June 30, 2020.
The tea farmers will now be direct beneficiaries of dividends from the profits of KTDA derived from its income and that of its subsidiaries.
Among the new tea farmer category are hundreds of institutions registered as tea farmers and supply leaf to their factories, spread out in all the 12 KTDA zones in 17 counties in the country.
The institutions include catholic churches, PCEA churches, AIPCA churches, AIC churches, FPKA churches, AGC churches, SDA churches, secondary schools, primary schools, a seminary, mission hospitals, self help groups, cooperative societies, Nyayo tea zone corporation, prisons department, University of Kabianga and several companies.
Amongst the new changes include a seat on the board of KTDA directly elected by the shareholders at the company’s annual general meeting.
The farmers would be elected on one term, three-year basis from one of the 12 zones, which will rotate amongst them.
Other significant changes to the company articles passed by the shareholders include voting for all company directors on the floor at the annual general meetings.
This new process does away from the previous nomination where only directors of factories in a zone were involved in the zonal nomination exercises.
The company adopted a directors’ election process similar to companies under the Capital Markets Authority (CMA), where elections are carried out on the floor of the Annual General Meeting (AGM).