Regulator goes for looters of Mumias Sugar in new audit

?The looters behind the financial woes of Mumias Sugar Company may finally be exposed once an ongoing Sh30 million audit commissioned by the Capital Markets Authority (CMA) is done.

The regulator, it has emerged, last year launched a forensic audit into the past management of the sugar miller and its board members even as it dithered into insolvency.

Allegations of impropriety have overshadowed attempts to save Mumias, with the State pumping Sh3.7 billion of taxpayers’ money into the ailing miller but has remained in a financial mess.

According to CMA’s annual report, the regulator decided to conduct the probe in April last year during its 279th meeting.

“The board approved the reallocation of budget to market intervention and professional and consultancy votes respectively from training and development, market development, Capital Markets Master-Plan and legal /litigation votes respectively, totaling to Sh30 million,” said CMA in the report.

“This was to facilitate forensic audit/investigations of operations of past management and board of Mumias Sugar Company Ltd conducted through the firm of M/S J Miles Ltd.”

Mumias, whose former Chief Executive Errol Johnson quit last year in unclear circumstances, has been mired in controversy. Mr Johnson, who is said to have gone back to Australia, accused some of the board members of helping siphon the bailout cash.

He told The Standard in a past interview that when some Sh239 million was released, he was told that a Sh10 million fee would be required to facilitate the release of the money.

Mr Kennedy Ngumbau, who replaced Daniel Ameyo as the chairman when he also called it quits, denied the allegations.

Deputy President William Ruto during a visit of the miller last year publicly gave the chairman two weeks to remove the so-called corrupt managers from the company.

The company’s legal officer was killed in an unsolved murder case in the same year, with trouble at the miller cumulating in the shutting down for maintenance amid piling losses and cane shortages.

Revelations that the company needs close to Sh20 billion if it is to pay debts it owes cane farmers, banks, employees and Kenya Revenue Authority (KRA) has brought it closer to its knees.

Although for half-year ended December 31, 2017 the firm cut its losses by more than a third (33 per cent) to Sh1.95 billion, its revenues fell by 55 per cent to Sh680 million and its brand has literally disappeared from supermarket shelves.

Currently, Mumias’ share is trading at between Sh0.90 and Sh0.95. At Sh0.90, Kenya’s oldest sugar company has wiped out 85.6 per cent of its value when compared to the 2001 listing price of Sh6.25.

At one point, the share rose to a high of Sh60.

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