company
CMA, Kakuzi Boss, CFO Grill on UK remittance
Wednesday, August 3, 2022
Chris Flowers, Managing Director, Kakuzi Plc. photo | Diana Nguila | NMG
The Capital Markets Authority (CMA) has questioned the Chief Executive Officer and Financial Director of Kakuzi, a publicly traded food producer, on allegations of a conflict of interest in which Camellia Plc, a major shareholder, transferred profits abroad.
Kakuzi CEO Christopher Flowers, finance director Ketan Shah and finance director Benjamin Okiring have been contacted by the CMA in recent days, three sources familiar with the investigation said. business daily.
The CMA said an investigation agreement between Kakuzi and parent company Camellia Plc was allegedly a conflict of interest.
Regulators are also examining the financial impact of transfer prices for businesses to transact between different parts of the same organization.
Kakuzi declined to comment on the matter, saying he was directly involved with regulators. The company’s minority shareholders have previously complained of being excluded from a board managed by British company Camellia Plc.
The multinational company owns a controlling 50.7% stake in Kakuzi thanks to its stake in Bordure Limited and Lintak Investments.
A CMA official said, “I interviewed three people with Chris Flowers over the past three weeks.” business daily subject to anonymity. Kakuzi’s main activities include growing, packaging and selling avocados, macadamia nuts, blueberries, green tea leaves and forest products.
The company is also engaged in livestock breeding and the sale of beef. It exists in Muranga County in central Kenya and Nadi County in the Rift Valley.
“Camellia Plc is the ultimate parent company of the group. There are other Camellia Plc group companies involved with Kakuzi Plc through common stock,” the company says in its annual report for 2021.
“Fellow subsidiaries within the Camellia Plc Group act as brokers and managing agents for certain products and operations of the group.”
Kakuzi’s transactions with fellow subsidiaries amounted to Shh369.4 million of 369.4 million last year, involving Eastern Produce Kenya Limited, Robertson Bois Dickson Anderson (RBDA) Kenya branch and Eastern Produce Regional Services Limited.
“The group transfer pricing policy provides guidance for related party transactions conducted using arm’s length principles,” Kakuzi says in his annual report.
These deals will be the focus of CMA investigations. Market regulators have tightened their surveillance of agricultural counters for irregular practices that harm minority shareholders and farmers and benefit majority owners.
The CMA is also investigating Limuru Tea, managed by British multinational Unilever, for underestimating its 696.8 acre farm and book cuisine while the multinational corporation prepares to leave the company.
A source at CMA said Kakuzi is facing issues with a major shareholder who has long excluded local shareholders from the company’s board of directors. Kakuzi appointed its second-largest shareholder, John Kibunga Kimani, to its board of directors in a board reshuffle following allegations of human rights violations, including rape and violence.
Growing up as a squatter on Kakuzi’s farm, Dr Kimani failed an attempt to get a board position in an agricultural company, despite previously owning a 32.2% stake in the company worth 2.7 billion Shh.
The change came after law firm Leigh Day said in 2020 that it was representing victims in the London High Court to bring legal action against Camellia Plc against human rights violations by security guards hired by Kenya subsidiary Kakuzi.
This led Camellia, who took over Kakuzi’s majority shareholder in the 1990s, to commit to reform after being accused of forcing companies like British retailer Tesco to stop supplies, including avocados and macadamia nuts, from companies listed on the Nairobi Stock Exchange.
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