Twist and turns in Mumias lease war as court halts Treasury probe

Mumias Sugar Company Operations Manager Stephen Kihumba when he took former Kakamega Governor Wycliffe Oparanya and his delegation around the factory on July 26, 2022. [Benjamin Sakwa, Standard]

The battle over Mumias Sugar Company receivership continues to deepen after a commercial court intervened and stopped a probe allegedly commenced by the Treasury.

Justice Josephine Mongare halted the investigation or arrest of West Kenya Sugar Company boss Jaswant Singh Rai in an application he filed on July 19, 2023.

The judge also appointed a new administrator Harven Gadhoke after the lapse of Kereto Marima’s term.

In his application filed by senior lawyers Paul Muite and Martin Gitonga, Rai stated he was escorted from the JKIA to the Directorate of Criminal Investigations (DCI) in an alleged red alert against him.

He said at the DCI, he was allegedly informed he was to be questioned about his involvement in Mumias.

He argued the DCI is being used for ulterior motives. In addition, Rai said the main motivation was to harass him in a bid for him to drop his support of creditors against Mumias lease to Uganda-based sugar firm, Sarrai Group.

“The DCI has no justification for placing a red alert against me. I am not a criminal. I have not committed a crime… I verily believe that participating in the insolvency proceedings herein is not a criminal offence and as such no criminal culpability can arise from such participation,” argued Rai.

He urged the judge to intervene and block an alleged abuse of the criminal justice system on all issues relating to Mumias' assets and debts before the court.

Separately, it emerged that DCI had filed an application before the magistrate’s court seeking to probe claims of conspiracy to defraud, money laundering and fraud in relation to tax.

New twist in Mumias lease battle as firm sues for breach of orders

In the application filed before Senior Principal Magistrate Mark Ekhumbi, the DCI claimed the case being investigated was reported by National Treasury Cabinet Secretary Njuguna Ndungu.

At the same time, sleuths told the court that preliminary investigations had revealed several unnamed persons and companies had allegedly conspired to defraud Mumias to sabotage its revival and operations.

The DCI, Inspector General of Police and Director of Public Prosecution and Attorney General have now been roped in the case, with three applications being filed so far.

The initial application was filed by lawyer Jackline Kimeto over the probe into alleged conspiracy to defraud. Justice Mong’are barred the police from demanding documents, summoning or arresting her.

In her application, Kimeto said Mumias owes her Sh76 million in addition to the interest accrued over time.

She told the court that on June 12, this year, she received an unsigned and undated summons from a detective known as A Shuria requiring her to appear before him at DCI headquarters along Kiambu Road.

"According to the said summons, the said officer was making an enquiry into the alleged offence of conspiracy to defraud contrary to section 317 of the Penal Code apart from this, no other particulars have been provided,” said Kimeto adding that she was required to go with all documents in support of her case against Mumias.

At the same time, Kimeto said the officer asked her to provide evidence of gross misconduct of judicial officers handling the case on a petition filed before the Judicial Service Commission (JSC).

According to her, the summons had indicated that she would be prosecuted if she did not honour the orders.

She stated that she complied.

"Even though I honoured their summons and met them on the said June 13, 2023, it has become difficult to surrender my file and pleadings pertaining to IP E004 of 2019. As a result of this unwarranted and arbitrary threat to prosecution and arrest, I am at risk of being arrested,” she stated.

The case will be heard on October 6, 2023.