The lease of Mumias Sugar Company has taken a new twist after the Treasury launched a fight against West Kenya owner, Jaswant Rai’s bid to lease the company.
Treasury Principal Secretary Julius Muia opposed the bid stating that Rai could be keen to derail the revival of the ailing miller to protect his factories.
In court documents, Muia says that West Kenya would likely focus on protecting its market share and raw materials – sugarcane instead of reviving Mumias Sugar.
“That I verily believe that a direct competitor of Mumias Sugar Company Ltd (MSCL), especially one that has mills within the same vicinity as Mumias sugar and competes with it for resources including raw materials for sugar production, is unlikely to have the best interest of the sugar company due to conflict of interest,” Muia says.
This is the first time the State has directly opposed the bid by West Kenya, which has challenged the lease to Uganda-based Sarrai Group associated with Jaswant’s brother, Sarbi Singh Rai.
Kakamega County had also opposed West Kenya’s bid to lease Mumias Sugar Company, arguing that the firm associated with the Rai family had previously admitted that it was struggling financially.
In an application before the High Court, Kakamega County alleged that West Kenya had stated in a suit filed before the Employment and Labour court that it had suffered massive losses and was at risk of collapse, because of the effects of the Covid-19 pandemic.
The county attorney Vivianne Mmbaka said the revelations were made in a suit filed by West Kenya as it sought to stop former employees from enforcing an award of Sh934.4 million, arising from salary arrears.
“It is strange and impractical for the 6th plaintiff (West Kenya) who is unable to settle a claim of Ksh507,488,511 to allege that, at the time of submitting the bids to the company which is just one year after the admission of its precarious financial situation, it was capable of injecting Sh36 billion into revival of the Company (Mumias),” she said in an affidavit.
West Kenya joined a case filed by five farmers opposing a 20-year lease awarded to Uganda-based Sarrai Group.
The court granted temporary orders, stopping Sarrai Group from taking over the Mumias, pending the determination of the case.
The High Court yesterday dismissed Tumaz & Tumaz Limited which challenged the 20-year-lease of Mumias Sugar Company.
Justice Anthony Ndung’u dismissed the case by the company, saying he did not have the jurisdiction to determine the matter since the case was already being handled in a different court.
According to the judge, the administrator PVR Rao was given the go-ahead to proceed with the opening of the bids by a different judge and an aggrieved party should, therefore, have moved before the same court for any issues surrounding the lease.
“To my mind, anyone dissatisfied with the conduct of the process by the 1st respondent (Rao) ought to raise the grievances before the court that had directed the threshold required to attain a flawless exercise,” he said.
The judge dismissed the case with costs to Sarrai Group and Rao, saying the administrator was at the time and still is, under control of Justice Alfred Mabeya who allowed the leasing process to proceed.
The judge noted that Tumaz, through its owner Julius Mwale, had also lost a request for review before the Public Procurement Administrative Review Board and moving to the High Court through a petition amounted to forum shopping and an abuse of the court process.
The High Court has already issued orders stopping Sarrai Group from proceeding with revival plans.
The Ugandan-based miller reportedly hit the ground running on December 22 after winning the bid to operate the ailing miller.
The miller was in September 2019 placed under receivership by KCB Group to protect its assets and maintain its operations.
CAPTION; Mumias Sugar Company entrance.
By Joy Kyalo
