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{
    "id": 1523678,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1523678/?format=api",
    "text_counter": 177,
    "type": "speech",
    "speaker_name": "Sen. Okenyuri",
    "speaker_title": "",
    "speaker": null,
    "content": "(8) EABL has corruptly disposed most of its properties and repatriated the sale proceeds to Diageo PLC. EABL is now a mere shell of itself, employing a paltry 600 employees. (9) Finally, the petitioner had made efforts to have this matter addressed by relevant authorities, but all of which have been unsuccessful. This matter was not pending before any court of law or any constitutional body. (10) The petitioner, therefore, prayed that the Senate investigate with view to recommending amendments to the Capital Markets Authority Act to cushion the shareholders from future manipulation. The Committee acknowledged the contribution by the petitioner, CMA, EABL, Competition Authority of Kenya (CAK) and the KRA for their detailed submission to the committee, which made consideration of the Petition a success. Further, the Committee thanks the offices of the Speaker and the Clerk of the Senate for the support extended to the Committee in execution of its mandate. I also appreciate Members of the committee for their patience, sacrifice and commitment to public service, which enabled the Committee to complete the assigned task. To enable a judicious disposal of the Petition, the Committee conducted an investigation and engaged with all relevant institutions and persons of interest in addressing issues raised in the Petition as follows. We had the petitioner, the Capital Markets Authority, Competition Authority of Kenya, KRA and the KBL. The following are the submissions we drew as Members of the Committee. (a) With respect to the 1997 EABL acquisition by Guinness PLC; EABL sought to raise Kshs1.5 billion from existing shareholders through a rights issue. At that time, the Guinness PLC held 25.06 per cent of the ordinary shares of EABL and was the underwriter for the rights issue. Subsequently, the shareholding of Guinness PLC increased to 46 per cent thereby making it the largest single shareholder in EABL. (b) Following an internal reorganization in 2000, Diageo Kenya, a subsidiary of the Diageo PLC, increased its shareholding in EABL to 50.03 per cent through the consolidation of shares from Guinness Overseas Holdings Limited and Diageo Holdings Netherlands BV with no change in beneficial ownership. (c) In October 2022, Diageo PLC announced plans to raise its stake in EABL from 50.03 per cent to 65 per cent. The CMA approved this acquisition on 23rd January, 2023, which reduced local shareholding in EABL to 35 per cent. (d) The tender offer was oversubscribed, receiving requests for 143.52 million shares against the 118.39 million that were sought. The attractive offer included eligibility for an interim dividend of Kshs3.50 per share. (e) Diageo's acquisition of additional 14.97 per cent stake did not classify as a merger under the Competition Act, since this did not change beneficial ownership. Diageo was already a majority shareholder. (f) In Kenya's alcoholic beverage sector, where there are no statutory limits on foreign ownership, Diageo's increased to a 16 per cent stake control without restrictions and there being no evidence that Diageo Kenya intended to acquire shares of resale to Heineken /Castle Group or any other buyer. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
}