Residents of Kilifi North have petitioned Parliament to initiate an inquiry into the collapse of the Kenya Cashew Nuts Factory.
Cashew nuts farming had been the economic mainstay of the constituency’s economy. Through MP Owen Baya, the petitioners want the lawmakers to establish what led to the collapse of the once giant firm.
The factory was established in 1975 by then Kenya Nuts Limited. It had the capacity to process 15,000 tonnes of nuts per year. It served farmers in the Coast region through their cooperative societies and the Kilifi District Cooperative Union (KDCU).
The petitioners want investigations to focus on how Kenya Planters and Products Limited (KPPL) and the Cashew Developments Investment Limited—both private companies—obtained 51 and 14 per cent of the government shareholding respectively.
They demand compensation for the workers who, they say, were 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 horticulture manufacturing factory that can process cashew nuts, mangoes and coconut, among other products, as part of the government’s Big Four agenda,” the petitioners prayed.
They want the committee “to recommends that former workers be paid their dues” and factory’s ownership be reverted to the people of Kilifi.
By 1982, the firm had 65 per cent government shareholding through the National Cereals and Produce Board, the Industrial Commercial Development Cooperation and the Industrial Development Bank, while the cooperative movement held the remaining 35 per cent through KDCU.
According to the petition before the House, KDCU officials colluded with some individuals to deny farmers and the government money through the transfer.
“They deprived farmers of the opportunity to purchase the 65 per cent shareholding via their preemptive rights, which later led to KDCU being excluded from management of the factory despite holding 35 per cent shareholding,” the petition reads.
After the transfer, the petitioners alleged that the 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 KDCU officials, and ultimately led to the flawed and irregular acquisition of the factory from the bonafide shareholders.”
A year later, the factory closed up shop, a development that the petitioners claimed hit hard the economy of the region, resulting in joblessness after farmers were left stranded.
At the time the factory was going down, it had unserviced Sh95 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.”