18 State-owned enterprises to operate as Public Limited Companies in new Bill
Re-registering the entities as PLCs would allow them to raise capital by offering shares to the public while protecting shareholders with limited liability.
Eighteen government-owned corporations are poised to be re-registered as public limited companies (PLCs) if Parliament passes a new Bill that aims to transform their governance and financial operations.
Majority Leader Kimani Ichung’wah tabled the proposal in the National Assembly, naming key agencies set for the shift, including Kenya Ports Authority, Kenya Railways Corporation, Kenya Literature Bureau, Kenya Airports Authority, Agricultural Finance Corporation, Nyayo Tea Zones Development Corporation, and the Commodities Fund.
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Other corporations in the list are Kenya Post Office Savings Bank, Kenya Meat Commission, Kenya Fishing Industries Corporation, National Mining Corporation, Kenya Veterinary Vaccine Production Institute, Kenya Broadcasting Corporation, and the National Cereals and Produce Board. The Kenyatta International Convention Centre and Agricultural Development Corporation are also included.
“The respective government-owned enterprises provided in the second schedule shall, in exercise of the powers conferred by Section 30 of the Interpretation and General Provisions Act, incorporate in their names a public limited liability company under the provisions of the Companies Act,” Ichung’wah said in the Bill.
Re-registering the entities as PLCs would allow them to raise capital by offering shares to the public while protecting shareholders with limited liability.
The change also positions the corporations to operate more commercially, with a focus on profitability, financial independence, and accountability to the public through the Treasury.
The Bill further outlines how new government-owned enterprises will be created. Line ministries will need to submit proposals to the Treasury, including a detailed business case assessing financial viability, objectives, impact on government finances, and State shareholding.
“The business case in subsection (3)(a) shall be informed by a feasibility assessment report for the purpose of ascertaining the financial and economic viability of establishing the proposed government-owned entity; whether or not the proposed activity cannot be achieved through an existing government-owned enterprise or through the private sector,” the bill states.
Once the Treasury is satisfied, it forwards the proposal to the Cabinet for approval.
“Upon approval of the establishment of the government-owned enterprise by the Cabinet, the necessary establishment process shall be undertaken by the Cabinet Secretary for the National Treasury,” Ichung’wah said.
If approved, all new and restructured corporations will run on commercial principles, with the Treasury overseeing their operations and the Cabinet holding the final say on new establishments.
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