MPs threaten to halt sale of East Africa Portland Cement

Members of parliament are threatening to stop the proposed acquisition of East Africa Portland Cement should the process fail to be done above board.

The parliamentary committee on trade, industry and cooperatives has raised questions over the planned acquisition of EAPC shares by Kalahari Group, terming the process opaque and potentially a “hostile takeover.” 

This refers to a company acquiring another against the wishes of the target company's management and board.

During a heated session chaired by Aldai MP and the committee's vice chairperson ,Maryanne Keitany, MPs questioned why the company’s management, employees and the public had not been adequately involved.

This is despite 52 per cent of EAPC being owned through the National Treasury and the National Social Security Fund (NSSF).

“So, it is a very pertinent question, because the majority of these 52 per cent represent also the same staff and also these same staff have relatives, they have their own livelihoods, that we must understand what plans are there,” said Keitany.

While pocking holes on the proposed deal the committee sought to determine whether the acquisition safeguards the interests of government, minority shareholders and employees.

“Public participation is critical, because this is not just any private company. The people of Kenya, through their pensions and taxes, own a majority of this firm. We must know if due diligence was done and if employees and local communities were involved,” Keitany said.

EAPC managing director Mohamed Adan confirmed that neither management nor staff had been engaged on the proposed transaction.

He noted that uncertainty had created anxiety among employees about potential job losses and changes in operations.

“As management, we have not been approached, and there has been no visibility on due diligence. Employees are understandably jittery, because livelihoods are at stake. Human capital is key to our success, and any change of ownership will affect them,” Adan told MPs.

Lawmakers further pressed Adan on whether the company had the financial capacity to buy back the shares itself instead of waiting for Kalahari’s takeover.

Funyula Member of parliament Wilberforce Oundo questioned why EAPC couldn’t acquire the shares by itself rather than letting an entity that has announced plans to exit the sub-Saharan market take over.

“Why are you planning to wait to buy the shares or buy back from Kalahari? Because Kalahari is basically the one buying from Holcim, according to the proposed sale. So, why are you waiting for them to buy, for you to buy from Kalahari?” paused Oundo,

“Why don't you just stand and say that we have the money, the money is available, and you are capable to buy?”

Adan revealed that share buyback was a possible option, given EAPC’s improved cash flow following a turnaround strategy.

“A share buyback could settle this matter once and for all, as it would increase the stake of existing shareholders. However, no such option has been tabled for us,” he said.

The committee questioned whether the Competition Authority of Kenya (CAK) and the Capital Markets Authority (CMA) had fulfilled their oversight roles, promising to summon the regulators for further scrutiny.

“Where there is no public participation, Parliament must step in to exercise its oversight duty. This deal touches on taxpayers, employees, and local communities in quarrying areas, and we cannot allow it to proceed in secrecy,” the committee warned.

The MPs further raised concerns about governance gaps, particularly the appointment of the board chair.

Keitany questioned why the process appeared to rely on government nomination rather than the company’s Memorandum and Articles of Association.

“You cannot run on tradition. Appointments must be anchored in law. We want the memos, articles and any State Corporations Act provisions governing this entity,” she demanded.

Adan admitted that the company’s Articles of Association, last updated in 1933, were outdated and inconsistent with current corporate governance laws, adding that EAPC would move to reconcile them with the Companies Act and the State Corporations Act.

On privatisation, the committee sought updates on government plans to list EAPC among parastatals set for sale. “What is the status of privatisation? Where is the process and what progress has been made?” Keitany asked.

MPs also pressed Adan on whether the company had visibility of Kalahari Cement Limited’s long-term strategy, given its existing operations through Bamburi Cement — a direct competitor of EAPC. Adan said the company had no official communication from the prospective buyer, noting that “much of what we hear is market speculation.”

Members, however, expressed disbelief. “It is inconceivable that a shareholder can begin disposing of shares without the board having some visibility,” one MP remarked, questioning why no due diligence had been conducted with EAP