Inside Politics

Board starts process to audit KTDA factories, subsidiaries

Tuesday, October 12th, 2021 00:00 |
A small scale tea farmer picks tea. Photo/PD/File

Kenya Tea Development Agency (KTDA) Holdings board has prequalified firms to undertake a forensic audit on financial and operational performance of the company and its subsidiary companies and smallholder tea factories for the last ten years.

The board chairman David Ichoho even though did not state the number, confirmed that few firms have qualified for the audit exercise in the targetted entities.

“In the coming about three weeks, the board will be working on final details with a view to fully contracting the organisations to start the audit work.

The forensic audit is part of the implementation of the government sponsored reforms,” he said in a phone interview.

Last week, the board appointed Wilson Muthaura as the Group CEO with effect from October 1, 2021.

Muthaura has been acting as the CEO since June 21 when the board sent on compulsory leave former CEO Lerionka Tiampati and together with other five senior managers.

The forensic audit was ordered sometimes this year by Agriculture Cabinet secretary Peter Munya who argued that it will help to establish any malpractices such as fraud or embezzlement of funds by previous boards of smallholder tea factories and KTDA.

“Those found culpable of any financial or other malpractices will be prosecuted,” he said.

Investigation agencies

Even as the board prepares for the start of the audit, investigation agencies are studying a report compiled a by multi-agency team established by the Attorney General in April this year.

The report put at risk former directors and managers of being prosecuted if found guilty of abuse of office and violating the agency governance structure.

Attorney General, according to findings of an inspection report recommended further investigations and prosecution of those persons found responsible for malpractices in KTDA Holdings, its subsidiaries and smallholder tea factories.

The inspection exercise of KTDA Holdings, subsidiary ownership and fiduciary responsibility of the directors was commissioned on April 2021.

Agriculture Cabinet Secretary Peter Munya last month confirmed that the team has finalised the exercise and the report is being reviewed by investigations agencies for further actions.

“The relevant government law enforcement agencies are studying the report from the inspection team to enable them take appropriate action.

Successful prosecution will lead to recovery of misappropriated assets and act as a deterrent measure against perpetuation of such malpractices in future,” he said.

Munya said the team has recommended the immediate restructuring of KTDA Holdings and its subsidiaries to re-align it to its core mandate of managing the smallholder tea sub-sector for the benefit of the growers. 

This implies the number of employees under the agency will in the long be reduced as part of taming operation cost and mainly the wage bill.  

This will eventually lead to scrapping of some positions, for example, the regional manager overseeing factories in certain regions.

The new board after assuming office on June 21, 2021 suspended six senior managers for a period of three months.

Five out of the six managers are yet to know their fate few days to the expiry of the holiday.

Before the end of the three months,  Tiampati opted for early retirement ahead of expiry of his contract.  

The other five managers are yet to know their fate as the board is reviewing their cases on individual basis.

Compulsory leave

“Senior managers who were sent on compulsory leave proceeded for their annual leave after completion of the compulsory leave period.

Their cases are being reviewed individually and the same shall be communicated to each of them in due course,” said the agency’s communications department.

Apart from Tiampati, the other five managers sent on compulsory leave are Company Secretary John Omanga, Managing Director Alfred Njagi, Finance and Strategy Director Benson Ngari, General Manager ICT David Mbugua and Head of Procurement and Logistics Brown Kanampiu.

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