Shareholders of Mumias Sugar Company are up in arms after the miller failed to pay dividends. This is the sixth year the sugar firm has failed to pay them any dividend even as losses went up.
Friday, during the 45th Annual General Meeting, shareholders blamed the board of directors for the problems that the troubled company is facing. Management reported that the company made Sh4.7 billion net loss compared to Sh4.6 billion announced in the previous year.
An audit report revealed that the company made a loss of Sh3.09 per share compared to Sh3.04 per share. The company said it was not advisable to pay dividends now since the firm was still in the red. “The directors do not recommend the payment of a dividend for the year,” said the company in a statement.
A section of the shareholders, however, said the aim for their investment in the company was to earn some dividend. Suliba Salee, a farmer and a shareholder from Busia said that they are not happy with the move by the company.
“We are feeling like we are not part of the company because we are not being told anything and also we have not received any gain from the company,” she said.
Florence Sylvia, another shareholder said she had to travel from Nairobi for the AGM only to be told that she was not going to get anything. “I came here with high expectations of going back to Nairobi with something but now I am disappointed. I am only going back with papers of today’s activities,” she said.
Other investors who also painted a gloomy picture on the future of the company called on the board of directors and management to step aside for taking the company to its death bed.
During the event, Chairman Dan Ameyo announced that he will not be seeking to retain his position and would be pursuing other interests. “I am happy with the decision that the chairperson has made and as stakeholders we would have been happy if the whole board stepped aside,” said Charles Atyang, a stakeholder.
Contracted farmers accused the management of paying other cane providers from other regions within a short period but ignoring farmers who are also shareholders. “As you pay the company’s debts, please, pay farmers also,” said Francis Wangara, a farmer.
They accused management of having too many directors who earned huge allowances despite the firm struggling to stay afloat, what the company denied.
Mumias Chief Executive Officer Errol Johnson revealed that the company has debts amounting to Sh11 billion. Farmers who have also complained of delays in payment and have threatened to stop delivering cane to the factory are owed millions by the company. “We still owe farmers about Sh650 million,” said Johnson.
But the firm managed to register a 14 percent increase in turnover for the period ending June 30, 2016. The total turnover rose to Sh6.2 million from Sh5.5 million in 2015.