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Keep off Mumias Sugar affairs, politicians told

By Robert Amalemba | Apr 23rd 2022 | 3 min read
By Robert Amalemba | April 23rd 2022
Contract awarded to Uganda's Sarrai Group was thrown out by court on April 14. [Benjamin Sakwa, Standard]

Politicians have been told to keep off Mumias Sugar affairs after the court-appointed a new receiver-manager who is expected to lead the miller's revival.

Representatives of sugarcane farmers cited political interference as a key stumbling block in plans to revamp the company.

Patrick Mutimba, the chairman of former Mumias Sugar employees, said over 2, 000 former employees of the company are wallowing in abject poverty after they were rendered jobless, sentiments echoed by Kenya National Federation of Sugarcane Farmers (KNFSF) Mumias branch.

“We have information that politicians infiltrated the lease process of the firm which has since been cancelled by the High Court because it was not done overboard," he said.

"We, therefore, appeal for them to exercise sobriety as the company searches for a competent firm to run it after Sarrai Group from Uganda was kicked out.”

KNFSF Deputy Secretary-General Simon Wesechere said an audit of the company's assets must be conducted as Sarrai Group exit, claiming that some important records and equipment ought to be accounted for by both Sarrai Group and the outgoing receiver-manager Ponangipalli Venkata Ramana (PVR) Rao.

“This vandalism could not take place if we had visionary politicians who had the zeal to see the firm revived for the good of the people,” he said.

Lawyer Paul Muite, who represented one of the aggrieved bidders, West Kenya Sugar Company, in court leading to the kicking out of Sarrai Group has called on politicians and the Kakamega County Government to explain why they supported the receiver manager's decision to settle on Sarrai Group.

“The county administration and politicians owe the people an explanation on how the Mumias lease process was handled,” he said.

The county petitioned the High Court in Kakamega in January to stop Tumaz and Tumaz Enterprises, a firm associated with investor Julius Mwale from interfering with Sarrai’s Mumias lease.

Tumaz had offered Sh27.6 billion for the leasing of Mumias Sugar assets, with West Kenya also against the awarding of the Ugandan firm.

Judge Alfred Mabeya, however, revoked the lease award to Sarrai Group on April 14 and subsequently removed Mr Rao as the administrator of the troubled miller.

The court at the same time appointed Kereto Marima as the new administrator for the miller.

“Rao awarded the lease to the lowest bidder while there were higher bidders, without giving any justifiable explanation,” said the judge in his determination.

Justice Mabeya said the Mumias Sugar administrator gave an unsatisfactory explanation as to why other bids that were higher than that of Sarrai's Sh5.8 billion were disqualified.

“The manner in which Rao handled the leasing process did not tally with what was expected of him as an administrator," the judge said.

He questioned why Mr Rao refused to table the lease agreement before court.

"The same (lease) was withheld from the court without any explanation. What did it contain that Rao did not want the court to see?” the judge posed. 

Mr Muite said the new court-appointed administrator Kereto Marima would revive the company in a transparent manner.

He said the ruling was a win for farmers, some of whom delivered their sugarcane to the factory long ago and have not been paid. They are among creditors to the company who are yet to be paid over Sh12 billion.

Mr Marima was given 60 days to report the list of both secured and unsecured creditors and their amounts to court before initiating a fresh leasing process.

Mr Mwale, who has invested in the Mwale Medical and Technology City in Kakamega, said that his company will bid again when the process starts.

“The court made a well-argued and reasoned judgement, which is for the public good,” he said.

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