Consumer lobby group Cofek has challenged plans to dispose of the National Social Security Fund (NSSF) shares in East African Portland Cement (EAPC) to Tanzania’s Kalahari Cement Limited.

Kalahari Cement is acquiring a 27 percent stake in East African Portland Cement (EAPC) from the National Social Security Fund (NSSF) for Ksh1.6 billion.

If the deal goes through, Kalahari and its parent company, Amsons Group, will have a controlling stake in EAPC once regulatory approvals are in place.

Consumer Federation of Kenya (Cofek) has moved to court to challenge the intended transaction.

Cofek Highlights Foreign Control

Cofek argues that the deal would result in effective foreign control or majority influence over EAPC, a strategic Kenyan cement manufacturer with historical State ownership and national economic importance.

The acquisition, which follows Kalahari’s previous 29.2 percent purchase from other shareholders, will result in Kalahari Cement and its affiliates holding an effective 68.7 percent controlling stake in EAPC.

Also Read: Kalahari Cement Acquires Stake in East African Portland Cement

Constitutional Issues and Public Interest

The lobby says the planned acquisition raises serious constitutional, regulatory, and public-interest considerations.

Cofek further claims that the move has proceeded without full public disclosure, regulatory transparency, or demonstrable compliance with the Capital Markets Act, the Competition Act, the Public Finance Management Act, and applicable governance standards.

“Unless this Honourable Court intervenes urgently, the sale and transfer of NSSF shares to Kalahari Cement Limited may be completed imminently, resulting in irreversible consolidation of ownership and control, loss of public leverage, and rendering the present petition academic and nugatory,” the lobby group said in court documents.

Kalahari Cement, a subsidiary of the pan-African Energy and manufacturing business conglomerate Amsons Group, recently acquired a 29.2% stake in EAPC from Associated International Cement Limited (AIC) and Cementia Holding AG. Bamburi Cement Plc (a related company to Kalahari Cement) also holds approximately 12.5% of ordinary shares in EAPC.

Also Read: Tanzanian Investor Seals Ksh1.6B Deal to Acquire 27% of East African Portland Cement

Kalahari Cement  Plans for EAPC

Speaking when he confirmed the proposed transaction, Amsons Group Managing Director Edha Nahdi said Kalahari does not intend to make a general offer to acquire all the voting shares in EAPC and will apply to the Capital Markets Authority (CMA) for an exemption from the requirement to make a takeover offer to all shareholders of the cement manufacturing firm.

“Kalahari does not intend to delist EAPC from the NSE after completion of the Proposed Transaction. Kalahari, as a long-term strategic investor, is committed to assisting EAPC in achieving its strategic objectives whilst deepening the capital markets regime, which is vital for Kenya’s economic prosperity,” Nahdi said.

Nahdi reiterated that the transaction is designed to build long-term value for EAPC by strengthening the firm’s infrastructure and providing access to additional resources.

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Kalahari Cement truck. PHOTO/Courtesy.