Mumias Sugar CEO Nashon Aseka suspended over 'doubtful transactions'

NAIROBI, KENYA:

Mumias Sugar Company has replaced its Chief Executive Officer Nashon Aseka replacing him with company's head of Agriculture, Patrick Chebosi.

The new appointee will however hold the position in an acting capacity.

The company's board of directors confirmed the suspension of Mr Aseka earlier touted as the right man to take over the firm’s turnaround plan.

“The reason for the suspension was that some doubtful transactions appear to have been entered into without following due process and requisite approvals,” read a letter dated June 5, 2018, signed by the company's board chairman Kennedy Ngumbau.

Mumias, which used to be the East African nation’s leading producer at more than 250,000 tonnes a year, has been beset by poor management and mounting losses in recent years.

The company’s board said Aseka’s suspension would pave way for further investigation. It did not say how long the suspension, which takes immediate effect, would last.

“Some doubtful transactions appear to have been entered into without following due process and requisite approvals,” the board said in a statement, without giving details of the transaction.

The board named Patrick Chebosi, its head of agriculture, as acting chief executive officer.

Aseka said the transactions that the board was questioning were within his mandate as the company’s CEO, without giving details.

Mumias Sugar’s output fell to 15,891 tonnes in the year ended last June from 75,073 tonnes a year earlier, and the miller attributed this to cane shortage and a shutdown of its plant for maintenance.

It reported an annual pretax loss of Sh9.53 billion  ($94.45 million) versus a loss of Sh6.07 billion a year earlier.

Additional reporting by Reuters