Lawyer wants miller wound up over debt

Mumias Sugar Company

Law firm claims Mumias has failed to honour its end of the bargain after it was represented in several court cases since 2015.

Troubled Mumias Sugar Company risks being wound up over Sh76 million debt.

The sugar company is embroiled in a legal battle with Kimeto & Associates in which the law firm is demanding the amount accrued after representation in court cases.

The law firm ran by Jackline Kimeto claims in its insolvency papers that Mumias has failed to honour its end of the bargain, even after it was represented in court in several cases since 2015.

Court papers read that although the current management had promised to turn around the firm, the same has become an almost impossible task.

“In spite to various verbal commitments to pay... the said board seem to be unable to turn around the affairs of the company to meet its obligations to its creditors as well as properly account for the proceeds from the operations of the firm thereby piling more debts over existing debts,” the case filed before Milimani Commercial Court read in part.

The lawyer claims she was issued with several bouncing cheques. She noted that Mumias has not been in operation for the last year - making it more uncertain as to whether it can manage to pay its dues.

“I am aware that the company has not been operational for a period of over one year. The factory has shut down and its sugar cane is rotting in its nucleus estates,” she claims.

“I have also experienced extremely high management and staff turnover with each managing director being fired within less than one year for the last five years.”

Ms Kimeto said she represented the sugar firm in a suit where Kenya Power was seeking more than Sh1 billion from the miller.

Power purchase

In the suit, the power utility firm was demanding Sh1 billion out of a power purchase agreement between the two firms and signed in 2009.

Kenya Power had inked a deal in which Mumias Sugar Company would sell its surplus power and would, in turn, consume the same from Kenya Power whenever its generators died.

The firm was on its knees as it also owed seven banks Sh5 billion. It now faces another battle with its lawyer over an alleged unpaid debt.