TransCentury shareholders protest over increase in directors’ perks

Shareholders of troubled infrastructure company TransCentury mounted a rare protest against the company’s board of directors yesterday, opposing an increase of directors’ emoluments in a year when the company posted a Sh2.4 billion after-tax loss.

The shareholders at the company’s annual general meeting (AGM) held in Nairobi questioned why directors and top executives got an increase in remuneration in 2015 yet they got no dividend.

The company’s 2015 annual report shows its directors and executive officers will take home a total of Sh53 million in aggregate emoluments for 2015 compared to Sh51 million in 2014. 

“If we have to cut costs, everybody has to tighten their belts. Why is it that the directors’ fees keep increasing whereas you insist that we approve non-payment of dividends? You should also cut in half your fees,” said Mr Sam Moturi, a shareholder.      

As at December 31, TransCentury’s board consisted of the chairman Zephania Mbugua and seven non-executive directors.  Mr Mbugua told the shareholders that the company “has come out of the woods”.

“We feel we have passed the tough times and we will be discussing a different scenario in our next AGM,” said Mr Mbugua.

There was anxiety as shareholders hesitated to propose and second a resolution by the company’s board to extend the non-payment of dividend.

The once profitable company reported a Sh2.4 billion net loss for 2015 as high financing costs, foreign exchange losses and selling costs pushed it further into the red.

The firm’s net loss widened by 6.4 per cent from Sh2.3 billion it recorded during a similar period in 2014 as forex losses jumped from Sh184.3 million to Sh1.1 billion. Its revenue increased 15 per cent to close the year at Sh11.8 billion, but the earnings were whittled down by higher cost of sales which went up by a fifth.