James Finlay Kenya, in a bid to contain backlash from the sale of its tea estates, has reached out to leaders in the South Rift region for talks on a deal that did not involve local communities and county governments.
Sri Lankan-based multinational Browns Investments PLC has bought James Finlay’s estates in Kericho and Bomet counties for an undisclosed amount, in what has kicked off a storm in the region.
The multinational with roots in Scotland has, however, reserved 15 per cent of the company’s stake for sale to the local community and administration by a cooperative society. James Finlay has also retained the Soasa tea extraction facility, a packing house in Mombasa and forest plantations.
On Saturday, a high powered team from the company met Bomet Governor Hillary Barchok, County Assembly Speaker Cosmas Korir and some MCAs for discussions on some issues concerning the sale.
The group’s Corporate Affairs Director Ben Woolf and Mr Kamantha Amarasekera, a director of the Browns Investments, led the delegation to the Bomet County headquarters.
The meeting came a day after the James Finlay and Browns delegation met Kericho Governor Erick Mutai, County Assembly Speaker Patrick Mutai and MCAs.
“We made a strategic management and business decision to move away from growing tea so as to focus on the tea extraction for our various markets,” Mr Wolf said.
Responding to questions from journalists during a press briefing, Mr Woolf admitted that James Finlays did not conduct public participation as required, saying this would have created many challenges, which would have forestalled the deal.
“We have agreed with the local leaders on the issues and the direction we took as a business entity and we have confidence that Browns Investment will take the business to the next level and enhance relationships with the local community,” he said.
Mr Amarasekera did not speak during the media briefing but he indicated on Thursday that the Browns Investments will retain all the employers and foster relations with locals.
“We are proud to be moving a business with such a proud heritage into a new phase of sustainable growth. James Finlay Kenya is an incredible business, powered by an incredible community, and it has an exciting future. We warmly welcome all members of the James Finlay Kenya team into the Browns family” he said.
James Finlay, which has a presence in the UK, US, Sri Lanka, Dubai, Kenya, Argentina and China, stated on Wednesday, through Managing Director Simeon Hutchinson that it will continue to process and export tea products to its traditional markets.
Mr Hutchinson said business operations will continue as usual and that employees will not be affected in the change of management, while the corporate social responsibility programmes that were in place will continued under Browns Investments.
Bomet senator on James Finlay selling its Kenya tea business to Sri Lanka giant
Governor Barchok said the county government is confident that the new strategic investor will sustain good relations with the devolved government and create employment opportunities for locals.
“The fact that James Finlays and Browns Investments have set aside 15 per cent of the company’s stake for the local community is a great move that should be supported. We are looking forward to raising the ownership percentage in the future” he said.
Dr Mutai said on Friday that a technical team will be formed to look into how the 15 percent shares will be allocated to residents through the unnamed cooperative society.
“The team comprising our legal department, the departments of land and urban planning and the county assembly will look into the issues of resurveying and mechanisation in the company as we seek to have the local community benefit through creating business and employment opportunities,” he said after the meeting at the Kericho County headquarters.
Senate majority leader Aaron Cheruiyot has threatened to institute a class action suit against the company for selling the business without involving the county government, which is the custodian of the land, the local community and leaders.
“There is an emerging trend where multinationals sell off their business without the consent and concurrence of the county governments whose land they use on lease. That is illegal and unconstitutional,” Mr Cheruiyot, who is Kericho senator, said.
“We shall challenge the James Finlay sale in court in a class action suit,” Mr Cheruiyot stated shortly after the sale announcement was made.
Bomet Senator Hillary Sigei has also challenged the move saying it was illegal as the locals were not consulted.
“How did James Finlay arrive at the decision to pick a particular cooperative society without involving the residents through a public participation process? What is the value of the 15 per cent stake being offloaded to the local community?”
Browns Investments is part of the LOLC Holdings group of companies, with its headquarters in Colombo.
It owns Maturata Plantations, Hapugastenne Plantations and Udapuselawa Plantations and has 49 estates, covering 30,000 hectares with 10,000 employees.
Its entry into the Kenyan business arena comes two years after it acquired James Finlays estates in Sri Lanka.
