Kenya smallholder tea farmers earn Sh63.6 billion from tea exports
CMC unveils expansion plan despite boardroom wars
By Today Financial News Reporter
CMC motors have embarked on a business transformation process that will increase its market share in Kenya from 14 to 20 per cent in the next one year.
The company also intends to increase its presence in Uganda and Tanzania as well as venture into Southern Sudan where demand for agricultural inputs including tractors is high.
“Our bottom line results have been disappointing and unacceptable. We are keen on increasing our market share, which allows us to take the war to the doorstep of our competitors,” says Mr Bill Lay, company CEO.
Mr Lay says the company has the potential to become a major player in the East African region but it is dogged by administrative and procurement bottlenecks that must be addressed urgently.
He said the company that has also replaced its chairman of the board Mr Peter Muthoka and appointed Mr Joe Kibe needs to put in place a transparent corporate governance measures, cut unnecessary expenditures and enhance transparency in all its operations.
He defended the move to replace Mr Muthoka saying an internal audit report had revealed that he was trading directly with the company and there was therefore a conflict of interest.
Muthoka is the CEO of Andy Forwarders Services that is the largest supplier of logistics services to CMC having being paid Sh1.2 billion for rendering logistic services in the last 12 months.
His company is also accused of overcharging the company for services rendered and now the management wants it surcharged.
“The management was of the opinion that the amount overcharged by Andy Freight Forwarders could be between Sh1.5 billion and 2 billion in the last five years,” says Lay.
“Whist the outcome of the internal audit is highly regrettable and unfortunate; the board feels strongly the need to address the issue in an open and objective manner.”
The company is also seeking to recover millions of shillings stashed in the UK by two former directors of the company.
According to Lay, the management has uncovered evidence of illegal, offshore bank accounts in Jersey (UK) operated by the directors for many years.
“Details of these accounts were kept secret from other directors. One of the accounts has a balance of Sh240 million,” he says.
“The management is also investigating two additional offshore accounts with substantial transaction activity. It also continues to work on ways to repatriate these company funds for the benefit of CNMC shareholders.”