The Senate Standing Committee on Trade, Industrialization and Tourism Chaired by Kajiado Senator Lenku Ole Kanar Seki met today to consider a Petition presented to Senate by Sen. Wakili Hillary Sigei on behalf of the Petitioner Mr. Rono Nicholas from Bomet County concerning fraudulent shareholding activities and illegal acquisition of EABL. 

In his Petition the petitioner noted that Kenya Breweries Limited is one of the oldest publicly listed companies in Kenya having been established in the year 1922. 

He further highlighted that there has been a controversial majority acquisition of East African Breweries shares by Guinness PLC in 2000 which was strongly resisted by the people of the Republic of Kenya through Parliament. Despite knowing the dealings of the Capital Markets Authority (CMA), Kenya Revenue Authority (KRA), the National Treasury and East African Breweries Limited have since not acted to correct or stop the fraudulent activities of shareholding and the illegal acquisitions. 

To that effect, some of the backlash Guinness PLC made applied to cede back most of the acquired shares to Kenyans in due course. The Diageo PLC has now purported to acquire an additional 15 per cent shares in the East African Breweries Limited (EABL), this undertaking by Guinness PLC to cede back shares is actionable through a class action.

The recent acquisition of the extra 15 per cent in EABL is a fraud upon the people of Kenya as the shares are being acquired for an onward transfer to a new buyer at a much higher value for the benefit of the shareholders and to the detriment of Kenyan shareholders who will be denied the benefit of the higher price that would be onward obtained an onward sale has been agreed with another company and the purpose and purchase of an additional 15 per cent shares is meant to assure the purchaser of a controlling stake in East African Breweries Limited (EABL) after the onward sale. The sale of the shares has been prompted by the desire by the fraudulent purchaser to evade huge tax through massive processes within the system. 

The Petitioner noted that Kenya Breweries Limited (KBL), when it was locally owned, possessed massive real estate in Kenya that comprised staff houses, staff complexes, go downs and warehouses, factories and other assets and had employed over 6,000 Kenyans. EABL has corruptly disposed off all its properties and repatriated the sale proceeds and is now but a mere shell of itself, employing a paltry 600 employees. Having sold off all its properties, the new scheme is to quickly progress the sale and block the benefits that Kenyans ought to have benefited; and the overall impact of this continued, contrived corporate action is a serious betrayal of the interest of the people of Kenya and a parliamentary hearing is urgently required to interrogate these events and to secure the public interest of Kenya and its people. 

The petitioner pray that the Senate investigates with a view to recommending amendments to the Capital Markets Authority (CMA) Act to cushion the shareholders from such future manipulation. The Committee has resolved to invite the Petitioners, East Africa Breweries Ltd, the CS Ministry of Investment, Trade and Industry, The National Treasury, Capital Markets Authority (CMA), Kenya Revenue Authority (KRA), and Competition Authority of Kenya. 

The Committee also discussed logistics of the proposed fact finding visit to the Drumvale Farmers Cooperative Society Limited in Machakos County. 

Sen. Esther Okenyuri, Sen. Karungo Thangwa, Sen. Crystal Asige, Sen. Jackson Mandago, Sen. Dr. Lelegwe Ltumbesi and Sen. Andrew Omtatah were present in the meeting.