State to give Mumias Sugar Sh1b bailout
By ROSELYNE OBALA | March 13th 2015
NAIROBI: The Government has re-affirmed its commitment to bail out Mumias Sugar Company with a cash injection of Sh1 billion.
Agriculture Cabinet Secretary Felix Koskei said the ailing sugar miller required approximately Sh3 billion bailout to cater for its overhead costs as it seeks to rebuild its operations. "For this reason, it has been proposed that Treasury facilitates an immediate cash injection of Sh1 billion as soft loans to the company to enable it meet its day-to-day financial obligations," he said.
Mr Koskei said the immediate interventions to secure the company and employees facing a sack is to effect changes in the company’s board of management and set aside funds to fast track its recovery.
Appearing before the Senate Committee on Agriculture at County Hall, the CS noted that the forensic report by KPMG has exposed massive systemic failures in the governance structure of the company by the board of directors and management.
“A commitment to such governance change can be credibly communicated with a significant reconstitution at board level,” said Koskei.
He told the committee members that the process to bring on board a credible governance structure at management level at the company started on January 27 this year, with a competitive recruitment process, which will identify a new team to drive the business differently.
Koskei also assured the committee that those adversely mentioned in the KPMG forensic report to have been behind the company’s run down will be investigated and those found culpable prosecuted. He disclosed that a probe into the matter had been initiated. “Civil suits and criminal prosecution against top executives for losses made have been duly filed in court by the firm,” Koskei informed the committee chaired by Senator Kiraitu Murungi (Meru).
He said there will significant changes at the management level by the end of this month.
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