State Backs KTDA On New Voting System

The Government has now backed the new voting system adopted by the Kenya Tea Development Agency that gives farmers with more shares more say in the control and management of tea factories in their areas.

The move has crippled efforts by small-scale tea farmers who wanted to retain the traditional one-man one-vote pattern that saw directors elected on the strength of individual votes than the number of shares held.

Agriculture Permanent Secretary, Romano Kiome, has thrown a life line to the big farmers and for the first time Mr Kiome said the new voting method was part of recommendations of the Tea Task Force appointed by the Ministry of Agriculture early last year, and received presentations from growers on a wide range of issues, including on the new system of voting based on strength of shares.

The implementation of the new voting system has thrown wide the race for the management of Kenya's tea sector although it faced teething problems.

Each of the 54 KTDA-managed factories was to elect two new directors. Of the 51 factories that went for elections on Tuesday, 44 had full participation while elections did not take place in three factories as farmers were undecided on the mode. In four factories, election took place in one of the two electoral areas.

The new system, in line with the Companies Act, marks the first time that the new secret ballot system of method of one share one vote, is being introduced to replace the one man one vote.

The 54 KTDA-managed factory companies are all independent factories registered under Companies Act.

However, the elections were marked by protests, boycotts and confusion over change of voting system, with farmers rejecting proposals to switch to a polling system based on share strength, saying it would give a few of the large scale growers a chance to control the tea sector.

The factory companies have two types of shareholding: commercial shareholders and founder shareholders. The share holding of factory companies is limited to the more than 430,000 growers.

The founder shareholder does not earn dividends as the commercial shareholder does, but participates in the decision making process of the company through his shares, which includes electing directors, declaring dividends for the commercial shareholders and receiving the audited accounts.

Every registered grower is, by virtue of the articles of the companies, allotted 5 founder shares upon registration. As was done with the commercial shares, bonus shares were issued to existing founder shareholders based upon delivery of tea between the period 1st July 2006 to 30th June 2007.

The formula of issuance of bonus shares was based on delivery of green leaf by every grower to the factory.

The resultant effect was therefore that each grower received bonus shares commensurate to their delivery of green leaf to the factory for the period 1st July 2006 to June 30 2007.