Mumias seek legal action to recover Sh1.2b from former managers

Mumias Sugar Company will move to court to recover Sh1.2 billion allegedly embezzled by former managers.

Last year, Mumias hired audit firm KPMG to probe irregular importation of sugar by the company that cost it billions of shillings. The audit report established that some senior managers were allegedly involved in illegal importation.

Speaking on Friday during the Company’s Annual General Meeting in Kisumu, board chairman Dan Ameyo said they are ready with all necessary documents to press charges against those involved in the scam. “From the KPMG report, it is clear money was lost. We are ready to do this as early as next month through the courts,” he said.

In recent months, the factory has faced many challenges, ranging from steady decline in cane delivery to management related issues. Workers have gone for months without pay and Kenya Power disconnected its electricity over unpaid debt.

The challenges which have seen farmers scale back production while others quit sugarcane farming, have been aggravated by illegal sugar imports which threaten to send the company out of business.

Managing Director Coutts Otolo said radical measures, which include cane development and management changes, have seen the company make substantial gains. “This year’s total net turnover increased by 9.3 per cent to Sh13 billion as cane delivered to factory increased by 12.7 per cent (1.9 million tonnes) compared to the previous year’s 1.7 million tonnes,’’ he said.

The farmers welcomed the plan by the company to take the perpetrators to court, saying it is a good gesture as it will help solve the long standing challenges.

Led by the Secretary General of Kenya Sugarcane Growers’ Association (KESGA) Richard Ogendo, the farmers said the crisis bedeviling Mumias is already affecting the industry as other companies are skeptical about privatisation.

“It is clear that the company is ready to heed the plight of farmers by taking the suspects to court. Mumias for many years has been a role model for other firms in terms of diversification and privatisation and leaving it to collapse will not augur well for the industry,” he said.