Court battles are playing out between the union and the debenture holders, KCB- with two separate judgements last week, one allowing the sale of the assets and another blocking it. Photo/FILE A complete takeover is one of the options the government is exploring in its quest to save the troubled Kenya Planters’ Co-operative Union (KPCU) from auctioneers.
The takeover, just like it did with the Uchumi Supermarkets, will come as a big relief to the once vibrant organisation, whose assets avoided the auctioneers harmer last Friday over a debt owed to Kenya Commercial Bank (KCB) following a High Court ruling.
Structure to be adopted
According to insiders familiar with the matter, among matters under consideration is the structure that will be adopted in case the government opts to take over the coffee farmers’ premier organisation.
“The matter is being handled at the highest level of the government and among the options is takeover of KPCU to be ran by the government,” said the source who requested not to be named because he is not authorised to talk on behalf of the Ministry of Co-operatives.
KPCU has dual registration – as a co-operative under the societies Act and as a limited company under the companies Act.
Uchumi like rescue plan
When KCB placed KPCU under receivership in October last year over Sh644 million debt, Co-operative minister, Joseph Nyagah said the move would enable the government to initiate an Uchumi supermarket like rescue plan.
Mr Nyagah said the Cabinet had signalled its intention to have Sh600 million released to settle the debts.
He said the union required Sh90 million to meet its short term financial obligations as it undertakes business.
The ministry has since formed the Kenya Coffee Co-operative Exporters, which was expected to take up the coffee marketing, mostly utilising the second window of direct sales.But as the government is mulling over the future of KPCU, court battles are playing out between the union and the debenture holders, KCB- with two separate judgements last week, one allowing the sale of the assets and another blocking it.KPCU is disputing the Sh644 million debt claiming their account was manipulated and had already paid Sh1.5 billion, and that they had been overcharged by Sh192 million.The bank, however, has countered the claim saying the suit by the union was an ‘afterthought’ and a ‘red-herring’ that is meant to mask the union’s indebtedness.They have also questioned application of two interest rates […]
