Court orders EAPCC re-opened immediately

January 19, 2012

, NAIROBI, Kenya, Jan 19 – The High Court has ordered the immediate re-opening of the troubled East African Portland Cement Company (EAPCC) and warned the board of directors of dire consequences if they failed to comply with the directive.

High Court Judge Mohammed Warsame instructed that operations at the cement producer resume at 2.30pm on Thursday after a six-day closure that led to the loss of around Sh300 million in sales.

While delivering the ruling, Warsame said the company could not be run down as public interest overrides the interests of the parties in the dispute.

“Directors can afford to pay themselves their salaries and allowances but who is looking out for the interests of the public?” the judge asked the advocates representing the adversaries.

Industrialisation Permanent Secretary Karanja Kibicho welcomed the ruling, saying it gave the warring parties an opportunity to address each of their concerns holistically for the benefit of all stakeholders.

“The ruling that we have received today is excellent because we have an opportunity now both as the government and the board of Portland to go and address this issue,” he emphasised.

The judge ordered the directors to hold a board meeting and agree on the logistics of re-opening the Athi River-based plant.

“I direct that you hold a board meeting at the PS’s office at 1pm and then proceed to Athi River and re-open the factory,” he stressed while also directing the Commissioner of Police Matthew Iteere and the Provincial Commissioner in Rift Valley to provide security to the directors.

Operations at the firm have been paralysed since last week after workers barricaded the premises demanding a new board. Eventually, police were called in and took over access to the firm.

There were fears that if the enraged workers who were protesting the reinstatement of the board and the Managing Director Kephar Tande had access to the plant; they would destroy assets worth billions of shillings.

With the directors resuming work, they will be charged with the responsibility of safeguarding the assets, the judge ruled.

Warsame warned that he would dissolve the board If they fail to heed the orders to re-open the factory.

The boardroom wrangles that were kicked off by Industrialisation Minister Amason Kingi’s decision to suspend the board over malpractices spilled to the courts in late December last year.

Besides causing the factory to be shut down, the dispute has also led to the ban of the listed firm’s shares trading at the Nairobi Securities Exchange for a period of 60 days.

While the directors who were challenging the decision to suspend them got a reprieve when the court reinstated them, the minister has vigorously opposed it maintaining that the government, with a combined shareholding – through the NSSF – of 52.3 percent, has a say in the affairs of the board.

The High Court is expected to rule on Monday January 23, whether Kingi had the powers to suspend the board.

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