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New twist in Mumias lease deal as Tumaz, Sarrai battle over alleged contempt

BUSINESS
By Kamau Muthoni | Jan 8th 2022 | 3 min read
By Kamau Muthoni | January 8th 2022
BUSINESS

The battle over the Mumias Sugar Limited (MSC) lease award to a Uganda based firm has taken a new twist after another firm sued for contempt of court.

The legal fights have deepened with a new application to jail Sarrai Group directors and the receiver-manager Ponangipalli Venkata Ramana Rao.

This happened after Sarrai asked the court to lift lease freeze orders as it had allegedly started reviving the ailing miller before they were issued, Tumaz and Tumaz Enterprises Ltd has also moved to back the same seeking to jail Sarrai’s directors and Mumias receiver manager Rao over alleged contempt of court.

Tumaz is linked to businessman Julius Mwale.

In its application filed before High Court judge Jairus Ngaah, Tumaz claimed that Sarrai directors had in their court papers seeking to lift the orders issued December last year admitted they were aware of the court orders.

Tumaz lawyer Javier Munzala stated that the Ugandan miller has carried out construction works, ploughing of the farms, and rehabilitated the Mumias company roads in breach of court orders.

The lawyer also claims that Sarrai has allegedly changed security guards.

“ The second respondent through its director Rakesh Kumar Bavts have sworn an affidavit dated December 31, 2021, admitting that they have continued with the interference with the company assets during the pendency of the orders issued herein and therefore there is every indication that the Respondents are not keen to comply with this Court’s reasoned decision,” argued Munzala.

The battle is turning to a tower of barbel, with each party speaking its own language.

Sarrai in its application argued that Tumaz did not deserve the freeze orders as they were issued seven days after it had taken over Mumias.

Its lawyer Wesley Gichaba argued that the firm took over Mumias on December 22, 2021, while Justice Anthony Ndung’u issued his orders on the 29th.

“The orders issued on December 29, 2021, will cause untold suffering, embarrassment, and great financial loss and insurmountable economic prejudice to the applicant who has already made significant rehabilitation from the date of take-over,” argued Gichaba.

 Kumar told the court that the firm will incur massive losses if does not intervene.

“ The orders are so oppressive to the applicant (Sarrai) and the ex-parte applicant has not undertaken as to damages despite the huge investments already in place and most likely financial loss to be incurred in the even it does not succeed in the long run,” claimed Kumar.

The judge heard that Tumaz had also filed another case before the Public Procurement Administrative Review Board (PPARB).

In its new application, Tumaz now claims that Sarrai’s actions are intentional and should be punished.

Tumaz had bid Sh27.6 billion for the lease, France company Kruman- Finance bid 19 billion while Sarrai offered Sh11.5 billion for a similar number of years. 

“The respondents are intent on sanitizing their contempt and circumventing this honorable court’s ruling as they have produced photographic evidence with the time stamp depicting the date of occurrence as 2nd January, 2022 which clearly demonstrates that their illegal actions continued long after the Orders of this honorable had been duly served on them,” stated Munzala.

Justice Ngaah directed the application be placed before Justice Ndung’u who will be hearing the rival arguments on January 24.

“ I note also that my learned brother has scheduled the matter for hearing on January 24, 2022. For good order and in order to avoid the possibility of issuing conflicting orders, I direct that this matter be mentioned on January 10, 2022 before Justice Ndungu for directions or for such other orders that the learned judge may deem appropriate to make. It is so ordered,” ruled Justice Ngaah.

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