MPs Raise Concern Over Planned Sale of East Africa Portland Cement Shares

Members of Parliament have raised red flags over the planned sale of a significant stake in East Africa Portland Cement (EAPC) to Kalahari Cement Limited.

The National Assembly’s Committee on Trade, Industry and Cooperatives, led by Ikolomani MP Bernad Shinali, on Tuesday, September 16, questioned the secrecy surrounding the transaction, noting that neither EAPC’s management nor employees had been consulted.

EAPC Managing Director Mohamed Adan, who appeared before the committee, told the lawmakers that the sale involves 29.2% of the company’s shares currently held by Cementia Holdings AG and Associated International Cement Ltd.

Aladai MP Marianne Kitany expressed concern that the sale was proceeding without public participation, despite the government being the majority shareholder holding a combined 52.3% stake through the National Social Security Fund (27%) and the National Treasury (25.3%).

“This is not just any private company. Kenyans, through their pensions and taxes, own a majority of this firm. Due diligence must be done, and employees and local communities must be involved,” said Kitany.

If concluded, the deal would give Kalahari Cement a combined 41.7% stake, making it the biggest single shareholder in EAPC.

Adan admitted that neither management nor staff had been engaged in the process, warning that uncertainty had sparked fears of job losses.

“Employees are understandably jittery, because livelihoods are at stake. Human capital is key to our success, and any change of ownership will affect them,” the EAPC MD told MPs.

Funyula MP Wilberforce Oundo questioned why EAPC could not buy back the shares directly, instead of waiting for Kalahari to purchase the stake and only then considering a buyback.

Adan responded that a buyback was possible, citing stronger cash flow under a turnaround strategy, but acknowledged no formal proposal had been presented.

The committee also questioned why the company appeared to depend on government nomination of the board chairperson rather than the company’s governing documents

Adan explained that EAPC’s Articles of Association were outdated and inconsistent with modern laws.

The EAPC MD pledged to align the articles with the Companies Act and the State Corporations Act.

Further, the MPs sought clarity on Kalahari Cement’s long-term strategy, given its links to Bamburi Cement, a direct competitor.

Adan said management had received no official communication, describing most of the information as market speculation.

However, the MPs expressed skepticism that such a major transaction could proceed without board involvement, vowing to intensify their probe.

On August 1, Kalahari Cement announced that it had reached a share purchase agreement worth Ksh718.7 million with AIC and Cementia Holding AG for their respective stakes of 13.14 million and 13.18 million shares in EAPC, at a unit price of Ksh27.30 per share.

"Pursuant to a share purchase agreement dated July 31, 2025, Kalahari will acquire 13.14 million ordinary in the issued capital of EAPC from AIC, a company registered in accordance with the laws of England...and 13.18 million shares from Cementia Holding AG, a company registered according to the laws of Switzerland," said Kalahari in its notice.

The company is linked to Tanzanian tycoon Edhah Abdallah Munif who also acquired Bamburi Cement in December 2024 in a deal worth Ksh23.6 billion.