Business
Why Sh2B Tea Auction Has Been Suspended
The regional tea auction in Mombasa may lose up to Sh2 billion in business after it suspended its operations following last week’s raid by the State, its managers said.
The auction has been shut since Friday after detectives looking into the activities of the Kenya Tea Development Agency (KTDA) raided its offices and confiscated computers, laptops and transaction files dating back from 2014 as well as staff mobile phones. The State is seeking to unravel the reasons behind persistent low earnings by tea farmers.
The auction is run by the East Africa Tea Traders Association (EATTA) and serves more than 11 countries in the east and southern African region, including Kenya, Rwanda, Uganda, Burundi, Tanzania, Malawi, Ethiopia, DRC Congo, Mozambique, Rwanda and Madagascar.
Economic harm
“If we don’t run the auction tomorrow or the day after, they will be adversely affected. The auction is so significant because the trading that goes on here weekly is about Sh2 billion. What kind of harm can it be to our economy?” Said EATTA managing director Edward Mudibo.
President Uhuru Kenyatta last month ordered Attorney-General Kihara Kariuki “to conduct an inquiry into the alleged statutory and regulatory compliance breaches allegedly committed by KTDA and its directors”. This, he said, includes “potential price and auction manipulation, abuse of dominance, insider trading, wastefulness and breach of directors’ fiduciary duties”.
The inquiry will look into KTDA’s activities and those of its subsidiaries, including KTDA Management Services, Chai Trading Company, Kenya Tea Packers, Majani Insurance Brokers, Greenland Fedha, The Tea Machinery and Engineering Company, KTDA Power Company and Dubai-based KTDA DMCC.
Source: Business Daily.
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