- In retrospect, the process of reviving Panpaper has been a complete disaster.
- From the outset, there was no transparency.
I think that the fate of the Pan African Paper Mills, better known as PanPaper, until recently the largest paper maker in East Africa, is still a big story. Here is why.
First, because of the social misery that its imminent demise is sure to visit on hundreds of families and businesses, not only in the Webuye area but also on the economy of western Kenya in general.
Secondly, it is a lesson in how the people we entrust with the responsibility of negotiating with foreign investors on our behalf routinely cede our long-term strategic interests.
We allowed the Birla Group of India to skim surpluses from the company for years without committing new capital, and then to flee, leaving behind a heavily indebted company.
Thirdly, PanPaper’s fate is a compelling story about how vultures will hover around a carcass to take advantage, especially after the government has announced that it is going to pump in money to revive a dying company.
Fourthly, it is a compelling lesson in how receivers have mastered the art of deception, pretending to be solving a problem when their true intention is to hang on and make money by charging fees.
I will start with the latest news. From what I gather, Mr Ian Small and his partner have resigned from being the receiver managers of the company.
Mark you, Mr Small and his partner have been running the company for six years.
The public was made to believe that the receivership was part of a plan to revive the plant.
What I hear from the grapevine is that the parting of ways with the government has been acrimonious.
Just why have the receiver managers resigned? Here is the background to the saga.
Early this year, the receivers prepared a sales memorandum and advertised the assets of the company for sale to international investors.
Months later, they submitted a report to the government, recommending one of the bidders as the best candidate to purchase and revive PanPaper.
The difficulty arose when the receivers insisted that the proposed buyer be given major sweeteners, including access and approval to harvest timber from government forests at subsidised rates.
From what I gather, the receivers wanted an arrangement where the forest licences would be part of the sale agreement between the government and the buyer.