Petitioners want inquiry into the collapse of Kenya Cashew Nuts Factory

Residents of Kilifi North Constituency have petitioned Parliament to initiate inquiry into the collapse of the Kenya Cashew Nuts Factory which used to be the economic mainstay of the area.

Through their MP Owen Obaya, the petitioners want the lawmakers to establish factors that led to the collapse of the once giant firm.

They want probe to focus on how Kenya Planters and Products Limited (KPPL) and the Cashew Developments Investment Limited – both private companies – obtained 51 and 14 percent of the government shareholding respectively.

The defunct factory served farmers in the former Coast Province through their cooperative societies and the Kilifi District Co-operative Union (KDCU), and had by 1982 had 65 percent Government shareholding through the National Cereals and Produce Board, the Industrial Commercial Development Cooperation and the Industrial Development Bank the while the co-operative movement held the remaining 35 percent  through KDCU.

According to the petition before the House, there was collusion between KDCU officials and individuals and that no money was received by the farmers or the government through the transfer.

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“They deprived farmers the opportunity to purchase the 65 percent shareholding via their pre-emptive rights, which later led to KDCU being excluded from management of the factory despite holding 35 percent shareholding,” the petitioners said.

After the transfer, the petitioners alleged that KPPL in 1996 irregularly advanced Sh2 million loan facility to the factory allegedly for the purchase of cashew nuts from farmers.

“Although the loan was not repaid, it was obtained in fraudulent circumstances that involved the signing of blank share transfer forms for all union shares by union KDCU officials, and ultimately led to the flawed and irregular acquisition of the factory from the bonafide shareholders.”

A year later, the factory closed shop, a development that the petitioners claimed hit hard the economy of the region creating joblessness and left farmers stranded.

At the time the factory was going down, it had unserviced Sh 95 million Barclays Bank loan which the bank sold off to Millennium Management Limited for Sh58 million.

“The factory was ravaged and plundered by Millennium Management Limited and consequently all machines and equipment were transferred elsewhere, and laid-off workers were left without compensation.”

The petitioners now want Parliament to probe the circumstances of the collapse of the firm and compensation for the workers who left empty handed after years of service.

“The petitioners pray that the Committee recommends the restoration and revival of the Kenya Cashew Nuts Factory in Kilifi with the additional upgrade of turning it into a horticultural manufacturing factory that can process cashew nuts, mangoes, coconut among other products as part of the Government’s Big Four agenda,” the petitioners prayed.

“The committee recommends that the former workers be paid their dues as well as restoration of the factory’s ownership to the people of Kilifi.”

Kenya Cashew Nuts Factory was established in 1975 by then Kenya Nuts Limited with capacity to process 15,000 tonnes of nuts per year.