, NAIROBI, Kenya, Jan 9 – The High Court has reinstated the board and managing director of the troubled East African Portland Cement Company (EAPCC) until a case challenging their suspension is heard and determined.
Justice Joseph Mutava also blocked Peter Korir from acting as the firm’s managing director pending the conclusion of the case.
The court has also stopped acting Industrialisation Minister Amason Kingi from interfering with the company’s operations.
The High Court order will be in force until January 19 when the case will be heard in the presence of all parties.
Last week, the board moved to court to challenge the minister’s suspension order, arguing that he had no legal authority to dismiss them.
The board told the High Court on Friday to block the minister’s move because the company cannot function without a board.
“The company might fall on its knees as a result of the confusion,” EAPCC’s lawyer Adan Mohammed had told the court.
The company has been in the news in the last two weeks after the acting Industrialisation Minister sent the eight-member board including the Managing Director Kephar Tande packing, pending a forensic audit into allegations of malpractices and misappropriation of funds.
However, four board members moved to court to challenge the decision to suspend them, terming the action ‘illegal.’
The matter was further complicated by an interpretation given by Attorney General Githu Muigai that EAPCC was not a State parastatal and as such the government did not have the right to hire or fire any director at the cement producer.
The government holds a 25.3 percent stake while National Social Security Funds’ (NSSF) shareholding stands at 27 percent. French conglomerate, Lafarge holds a 41.7 percent stake while the remainder is held by the public through listing on the Nairobi Securities Exchange (NSE).
Although NSSF is a government agency, it operates as a separate entity. The government and NSSF are treated as two distinct shareholders of the cement firm.
On Friday, the court heard that there was serious confusion as to who was in charge at the cement company and that firm’s shares cannot trade at the NSE.
Kingi has objected to their reinstatement until a forensic audit into alleged loss of funds is finalised.
The minister argued on Thursday that recalling the board before the probe was complete would cause ‘substantial injustice’ as the directors might interfere with investigations and that gross misappropriation at the firm would not be unearthed.
The minister wants expenditure amounting to Sh13 million questioned by the Kenya National Audit office looked into first.
The audit is expected to take one month and the minister intends to make the outcome public.