The National Assembly has voiced strong concerns over the proposed sale of a 29.2% stake in East African Portland Cement (EAPC) to Kalahari Cement, warning that it could shift corporate control and reduce public influence in a strategic national asset.
During a Thursday session of the Trade, Industry and Cooperatives Committee, chaired by Benard Shinali and Vice Chair Marianne Kitany, lawmakers demanded answers on valuation, legal compliance, and the lack of consultation with company management and employees.
Treasury representatives, led by Director General for Investment and Portfolio Management Lawrence Kibet, insisted the transaction does not impact government holdings.
“The structure of shareholding in EAPC remains intact. Neither Treasury’s 25 percent nor NSSF’s 27 percent holding has been touched. What has been changing is within private investors,” Kibet explained, framing the sale as a private matter between non-state parties.
Despite these assurances, MPs pressed the Treasury on why it seemed to defend the deal despite not being directly involved.
Questions were raised over the proposed Sh27 per share price, which is less than half of the current trading value on the Nairobi Securities Exchange, estimated at between Sh58 and Sh64.
Funyula MP Wilberforce Oundo queried, “The question is about value, not percentage. What does it mean for the Kenyan public when shares are transferred privately at half the market rate?”
The EAPC Board warned that the sale could create concentrated ownership, granting Kalahari Cement, in association with Bamburi Cement, an effective 41.7% control of EAPC.
Board Chairman Brig (Rtd) Richard Mbabi noted, “Post-transaction, the beneficial owner would effectively control 41.7 percent of EAPC, a level of ownership likely to influence board voting rights and corporate decision-making.”
The board emphasised that such consolidation could undermine the influence of public shareholders and shift decision-making power toward a single private entity.
EAPC also stressed that the transaction undervalues the company and must adhere to the Companies Act, State Corporations Act, and corporate governance frameworks before it is finalised.
Mbabi added that the company’s five-year strategic plan, which prioritises operational efficiency and balance sheet restructuring, is aimed at reflecting the firm’s true intrinsic value.
The committee raised legal concerns after the Attorney General’s office disclosed it had not been consulted prior to the sale, highlighting potential conflicts between the Capital Markets Act and the Companies Act in off-market transfers.
MPs described the process as potentially unconstitutional and called for public participation in any future deals.
The session concluded with lawmakers insisting on full disclosure on pricing, legal compliance, and governance implications, underlining the need for transparency and safeguarding public interest in strategic national assets.