We’re not running away, insists James Finlay on sale of dispute-saddled firm
James Finlay Corporate Affairs Director Ben Woolf (right) addresses journalists while flanked by Bomet Governor Hillary Barchok (left) and other officials at the county headquarters in Bomet on Saturday.
Reeling from a multitude of cases amid allegations of sexual exploitation of workers and poor working conditions, tea multinational James Finlay Kenya has denied claims it sold its estates in the country to evade further scrutiny.
The company is also engaged in a stand-off with workers over its adoption of tea-plucking machines, while international retail outlets are threatening to boycott its products following the sex scandals.
James Finlay termed as purely coincidental the timing of the announcement of its takeover by to Sri Lanka-based Browns Investments PLC just two days before the coronation of King Charles III in London on Saturday as the first British Monarch since 1953, following the death of his mother Queen Elizabeth II on September 8, 2022.
Announcing the sale deal on Thursday last week, James Finlay Group Managing Director James Woodrow said a 15 per cent stake will be retained by a local cooperative society while the company will keep its Saosa tea extracting facility, forest plantations, its sourcing and packing operations in Mombasa and will continue to export tea to various markets in the world.
The multinational company with roots in Scotland had battled to fend off claims that the sale of part of its estates in Bomet and Kericho counties was linked to the boycott of its products by US-based eatery Starbucks, the world’s largest multinational chain of coffee houses, following the outbreak of sex scandals.
Directly responded
UK-based retailers Tesco and Sainsbury’s have also condemned claims of sexual exploitation of female workers, brought to light by an exposé by the BBC in a documentary published on February 20 and a series of special reports carried by Nation.
James Finlay Group Corporate Affairs Director Ben Woolf,for the first time, directly responded to a myriad of issues that have dogged the company since setting base in Kenya in 1925.
“The announcement of the sale of the company to Browns Investments PLC and the King Charles III coronation are purely coincidental and unrelated,” Mr Woolf said in Bomet.
James Finlay,headquartered in Aberdeen, Scotland, was founded in 1750 and is now part of part of the Swire Group, a global firm whose tea and coffee products are stocked by leading outlets in the UK including Tesco, Sainsbury’s, Starbucks, the Co-op and Bettys &Taylors Group.
Local communities
Browns Investments PLC is part of LOLC Holdings, which owns 49 plantations in Sri Lanka, including Maturata, Hapugastenne, and Udapuselawa with over 30,000 acres under tea and 10,000 employees.
“Talks between James Finlay and Browns ... started two years ago and were concluded this year,” Mr Woolf revealed. In effect, it started shortly after Browns Investment PLC bought James Finlay tea estates in Sri Lanka (in 2021), before the firm extended its business tentacles to Kenya.
The sale has been seen as an effort to redeem the image of the company following sex scandals, a litany of court cases in Kenya and the UK by former and current workers who claim to have been subjected to poor working conditions and a spat with local communities and leaders over the mechanisation of its estates that has seen massive layoffs.
In the BBC exposé, more than 70 women came forward to state that they were sexually exploited by managers, supervisors and contractors at James Finlay and another multinational, Eketerra (formerly Unilever). The two companies have since suspended the managers and supervisors and severed ties with a contractor implicated in the scandal. The sale of the estates, Mr Woolf said, is not in any way linked to the claims of sexual exploitation of workers “which is a matter that is still under investigations.”
“Following the BBC documentary ... investigations were done and continue to be undertaken and we are implementing various actions and recommendations [to curb recurrence of the cases],” Mr Woolf said.
More conducive
He expressed confidence that Browns Investments PLC would continue to implement and follow up on the recommendations made to make the working environment more conducive for employees.
Senate Majority Leader Aaron Cheruiyot, Bomet Senator Hillary Sigei and former Bomet Senator Christopher Langat have termed the sale as illegal, accusing the company of failing to consult local communities and county governments that holds the land the company operates from in trust. Mr Cheruiyot has threatened to institute a class action suit against the company for the deal whose finer details are yet to be made public.
“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 the Kericho Senator, said.
Mr Sigei said locals should have been consulted before the sale of the company.
“For the record, we welcome all local and international investors to the region and as a country. But ... there are many cases and petitions against James Finlay by the community and former workers yet they have gone ahead to sell the company without giving a chance to local investors,” Mr Sigei said.
“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 percent stake being offloaded to the local community?” Mr Sigei wondered.
Own the land
Mr Woolf admitted that the company did not engage the local community, leaders and the county governments of Bomet and Kericho, who own the land in which the tea estates stand, before selling part of the company for an undisclosed amount.
“We thought that going public with plans to sell the estate would create huge uncertainty to the local communities and lead to disruption for the business,” Mr Woolf said at a press briefing after a meeting with Bomet Governor Hillary Barchok and members of the county assembly led by Speaker Cosmas Korir at the county headquarters.
Mr Woolf said the company took a decision to directly engage a strategic partner, during which they picked Browns Investments PLC, and immediately informed all stakeholders once an agreement between the two companies was reached.
Prof Barchok has now come out to defend the company over the transaction, saying, it did the right thing under the circumstances by reserving 15 per cent of its shareholding to the local community.
“The company did not want to deal with so many people in the transaction. The logistics of dealing with one million people is not possible, but [offloading] 15 per cent shares through a cooperative society to the local community is workable,” said Prof Barchok.
Change of heart
Kericho Governor Erick Mutai also appears to have had a change of heart, hailing the 15 percent stake that has been allocated to the local community.
Dr Mutai said a technical team will be formed to look into the number of issues that had been raised by stakeholders even as the new investor prepares to take over.
“The team comprising our legal officers and others from the Department 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 ensure that local communities benefit through creating business and employment opportunities,” Dr Mutai said.
James Finlay is also involved in a dispute with county governments over land lease and rates and is accused of defying an order by the National Land Commission (NLC) to have the land the estates sit on resurveyed.
Youths have been engaged in running battles with the police in the last one year over invasion of the tea estates.
