Kenya: NSSF faces off with Lafarge over board seat at Bamburi

Kenya: NSSF faces off with Lafarge over board seat at Bamburi
24 April 2012

National Social Security Fund (NSSF) is set to open a fresh fight with French conglomerate Lafarge over the control of Bamburi Cement as it demands a seat on the cement maker’s board it lost last year. The cement firm – which is owned 58.4% by Lafarge – dropped NSSF representative Alex Kazongo from its board in March, citing his failure to attend successive meetings.

Now, the fund has written to Bamburi Cement seeking a position in the board, but it says the company has told it to present its nominee before shareholders at an annual general meeting (AGM) slated for June.

“NSSF sent its replacement but was never admitted on the board,” said Adan Mohamed, the chairman of NSSF.

“We will seek to get back our seat on the Bamburi board in the next AGM since we were told it was not automatic after Mr Kazongo was pushed out,” he said.

The fund has a 14.71% stake in Bamburi and it will have to receive the blessing of Lafarge before being appointed to the board of Kenya’s largest cement producer.

Last year, the fund told the Business Daily that an investor can only be guaranteed a seat on Bamburi’s board if there stake is above 15% – underscoring the importance of Lafarge’s blessing in NSSF’s quest for a directorship position in the cement company.

NSSF also has a seat on the troubled East Africa Portland Cement Company (EAPCC), which has been gripped by boardroom wrangles since December. The fund holds a 27% stake in Portland Cement while the government owns 25.3% with Lafarge 41%.

The quest to get a seat on Bamburi’s board comes at a moment when NSSF is seeking a larger say in companies where it has substantial shareholding such as National Bank of Kenya and EAPCC.

Bamburi reversed its profit drop to post a 11.5% increase to KES5.8bn (US$69.88m) in 2011 helped by export sales, weak shilling and product price increment.

Published under Cement News