Pain of Diamond Property Merchants agribusiness investors

Be Social. Share this Article

John Ngugi, MD, Diamond Property Merchants Ltd

My name is Francis and I am the chairman of Bethany Phase 4 Investors Committee. I called your offices earlier to book an appointment for Thursday 21st Dec 2017 at 2PM to allow the investors committee to come and register there complaint with what is happening in Bethany Phase 4. 

In June 2017, this committee was appointed by the over 1000 investors in Phase 4 to represent their interests. We began by meeting Diamond Property Merchants Ltd (DPM) and AgroExchage to discuss how this project would be implemented taking the learning from Phase1, Phase2 and Phase3. The following is what was agreed on during the meeting; 

  1. The farmer contract will run for 8 months per season from the 6 months per season in Phase 1, 2 and 3. This was necessitated by the experience in the previous phases that 6 months per season is too tight for the farm manager to guarantee the returns. The investors accepted.
  1. The guaranteed income per season will be reduced from Sh200,000 to Sh185,000 per season. This was based on the experiences of the previous phases. The farmers agreed to this as well. 
  1. We also agreed that Phase 4 will be implemented in different lots spaced between by a month to mitigate the payouts in one month. This was to protect DPM and farm manager against paying all farmers at once. This was also a learning taken from there previous phases. The different lots were to be divided as follows: 200 greenhouses in July 2017, 200 in August 2017, 400 in September 2017, 400 in October 2017. The allocation in each lot was being done on a first paying first allocated basis. 
  1. We also agreed that the farmers contract will be serialized based on when the farmer paid for the greenhouses. Based on the serial number you would be able to know which lot you are in. This was accepted. 
  1. DPM directed that all payment including the greenhouses payment was to be made directly to them. They said that this was a risk management issue. They opened an account specifically for receiving the greenhouse payment. This was done to allow for an arms length relationship from other accounts. This was accepted as well. 
  1. DPM was to disburse the funds to AgroExchange based on the lots paid for. This made sense and it was agreed on. 

Even after doing all these, the project has been dogged with a number of challenges most of them arising from DPM refusing to release the funds to the Farmer manager for implementing the project.  

We had a meeting with DPM and Agro Exchange at the site on 9th December 2017 and the minutes have been attached. If you review the minutes you will be able to see all the problems that have been caused by non disbursement of funds by DPM. It is our opinion that all these challenges would have been avoided had DPM delivered on their side. 

Our biggest concern is that DPM has collected over Sh225M from the farmers but they have only disbursed KeS 89M to the farm manager as per the meeting date. This is concerning to us and we think that DPM has channeled our funds to other areas. 

We are now calling upon COFEK to get involved and immediate on this issues. We agreed on some resolutions which until today have not been executed on by DPM. 

We are now kindly requesting for a meeting with COFEK, DPM, Bethany Phase 4 Committee and Agro Exchange to discuss this matter. Thank you.

COFEK RESPONSE: When the meeting was called by Cofek on December 21, 2017 DPM responded through its’ lawyer who said he was proceeding on leave the following day till January 9, 2017. The lawyer said DPM would not come to the meeting but may attend if the meeting was rescheduled to January. The meeting proceeded. Cofek is to send official communication to DPM 

Be Social. Share this Article