A controversial Sh322.5 million payment by the Kenya Tea Development Agency (KTDA) to a Chinese-linked supplier has triggered a criminal investigation, exposing sharp divisions within the agency’s leadership and raising fresh questions over governance at the farmer-owned tea giant.

The payment, made to Oriole Homes Ltd, is now under scrutiny by the Directorate of Criminal Investigations (DCI), which is investigating whether public funds were irregularly paid out despite legal advice and opposition from the board.

The controversy dates back to February 20, 2026, when the KTDA board met against the backdrop of mounting financial pressure. Farmers had complained of delayed and low tea bonus payments, while the National Assembly had opened investigations into the agency’s bonus distribution.

The board also acknowledged deteriorating financial health and discussed plans to engage lenders in restructuring loans to avoid possible default.

Among the key agenda items was a $2.5 million (Sh322.5 million) compensation claim by Oriole Homes Ltd, one of four companies under the Sanjiu Group, which is associated with Chinese businessman Ying Du and has secured several supply contracts with State agencies.

Oriole Homes had won a tender to supply 99,000 tonnes of NPK fertiliser to KTDA. Although delivery was delayed, the fertiliser was supplied in August 2025, accepted by KTDA and the company was paid the full contract sum of about Sh9 billion, effectively concluding the agreement.

However, on January 28, 2026, nearly five months after completing the contract, Oriole Homes wrote to KTDA demanding an additional Sh322.5 million, arguing that it had incurred foreign exchange losses because of delays between May and August 2025.

Read: How tea farmers lost Sh600m in dubious deals

The company attributed the delays to court cases challenging the award of the tender, while acknowledging that the circumstances amounted to force majeure — an unforeseen event beyond the control of either party that can frustrate the performance of a contract.

DCI Headquarters — The Directorate of Criminal Investigations (DCI) Headquarters along Kiambu Road.

Photo credit: File | Nation Media Group

Even so, the company maintained that KTDA should compensate it for the exchange-rate losses.

The claim immediately raised concerns within the board.

Declined to approve

During the February 20 meeting, directors declined to approve the payment and demanded justification before committing the agency to settle the claim.

Four days later, the company secretary wrote to KTDA’s head of legal, stating that currency fluctuations did not fall under force majeure provisions.

The legal opinion also noted that the contract had already expired and could not be amended or varied after completion.

Read: Tea farmers query KTDA over stalled power plans

Former national chairman Geoffrey Chege Kirundi also opposed the claim, maintaining that KTDA had no legal obligation to compensate a contractor for losses arising from a force majeure event. His objection, however, was not captured in the minutes of the Tender Board meeting where the matter was discussed.

Despite the legal reservations, KTDA paid Oriole Homes Sh322.5 million on May 18.

The payment has since become the subject of a DCI investigation, with detectives seeking to establish how the claim was approved and whether fraud was committed.

Five former and current officials have been summoned to assist investigators. They are former national chairman Mr Kirundi, legal officer Mathew Odero, company secretary Esther Osoro, finance official Tarsila Wanja and group head of procurement and logistics Peter Mugai.

In summons issued on July 28 by Nairobi Area DCI chief Daniel Kandie, the officials were directed to provide certified copies of the contract, board and tender committee minutes approving the payment, and financial records detailing how the money was released from KTDA Holdings accounts.

Read: Uhuru orders inquiry into KTDA activities and tea factory elections

“They will be required to provide certified copies of the contract documents, the minutes approving payment to MS Oriole Homes Limited and financial records detailing how the alleged amount was paid from KTDA Holdings accounts,” the summons state.

The five appeared before investigators three days later but were not required to record statements. Instead, they were instructed to compile and submit the requested documents before fresh interview dates are issued.

The investigation has also sparked a blame game within KTDA’s leadership.

Current national chairman Enos Njeru distanced himself from the payment, saying it was made before he assumed office.

Kenya Tea Development Agency Chairman Enos Njeru.

Photo credit: Francis Nderitu | Nation Media Group

“The best person to speak about it is the former chairman since he was the one in charge,” Mr Njeru told the Nation.

Asked whether the money had indeed been paid, Mr Njeru declined to comment, saying only his predecessor could address the matter.

Mr Kirundi, who is also a director of Murang’a-based Kiru Tea Factory, said he would not comment while investigations are ongoing.

“That matter is under investigation. I can only speak on it once the investigators are done,” he said.

Documents seen by the Nation, including board minutes and internal correspondence on the fertiliser procurement, indicate that 11 of the 12 directors opposed paying the Sh322.5 million claim.

Read: Tea baron’s Sh3bn deal costs Kenyan farmers Iran market

In a letter dated July 2, 2026, addressed to Mr Njeru, Mr Kirundi insisted that the official board minutes should accurately reflect his opposition to the payment.

He argued that there was no legal basis for compensating Oriole Homes after the contract had expired.

“The board had been advised by the management that the claim had no legal basis for payment. I stood by the legal opinion. As the chairperson of the board, I advised the board not to pay for the loss claimed, if it existed, for it was normal business risk and loss is borne by a party in international business,” Mr Kirundi wrote.

The DCI has said fresh dates for recording statements will be communicated to the officials as investigations continue.

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kamaina@ke.nationmedia.com