Audit flags gaps in billionaire Rai’s Nzoia Sugar lease deal
Kenyan tycoon Jaswant Singh Rai’s 30-year lease of Nzoia Sugar Company has sparked fresh scrutiny over transparency, asset valuation, and possible market concentration in the country’s sugar industry.
According to details revealed in an audit report by Auditor-General Nancy Gathungu, the leasing of the Bungoma-based miller to Rai’s West Kenya Sugar Company was concluded without key documentation, including a formal handover report and a verified asset valuation.
The absence of these records has raised questions about the integrity of the transaction.
“The process of leasing was successfully completed and a handing over between the awarded winner of the lease for the Company and the management of the Company was done on May 10, 2025 at the Company premises,” the Auditor-General noted in a report tabled in Parliament.
However, she added that “no formal handing over document was provided for audit review, neither was a lease contract provided,” making it difficult to confirm whether the assets were properly valued before the deal was finalised.
Under the agreement, West Kenya Sugar will manage Nzoia Sugar’s factory and 3,600-hectare nucleus estate for 30 years, with commitments that include paying Sh4,000 per tonne of sugar and Sh3,000 per tonne of molasses produced. The firm also pledged a Sh5.76 billion investment alongside a goodwill payment of Sh208 million.
The lease forms part of a wider government strategy to revive struggling state-owned sugar mills through private sector management.
However, sugar industry players argue that the process risks concentrating control of the sector in the hands of a few powerful millers.
Rai’s growing influence in the industry has previously attracted controversy, with concerns over competition and cane supply dynamics in Western Kenya.
In 2023, Rai was dramatically abducted Rai and later released on Sunday, August 28, 24 hours after unknown men abducted him in broad daylight.
A viral video depicted his dramatic arrest.
The release came just hours after President William Ruto warned the billionaire industrialist, accusing him of exploiting sugar farmers in western Kenya without providing any evidence. Ruto’s remarks at a church service in Bungoma pointed to a government abduction, raising questions over the reasons for his arrests.
CCTV cameras captured Rai’s abduction in Kilimani. The businessman was waiting in traffic when unknown individuals driving a white Pickup truck suddenly parked in front of his vehicle and whisked him away.
His family filed a missing person complaint at the police station to help locate his whereabouts.
According to reports from the Kilimani Police Station, the Directorate of Criminal Investigations (DCI) was leading the investigations on the missing person report.
Rai produces at least half of the sugar consumed in Kenya according to data from the Sugar Directorate. Ruto’s remarks therefore were a veiled attack on the businessman who controls the sugar production in the western region.
“Msikuwe na wasiwasi niko hapo chonjo kabisa. Nitahakikisha hii kitu inakaa chonjo. Na wakora wote wako katikati. Msikuwe na wasiwasi ati kuna mtu atakuja kutuongelesha kingereza. Sijui mhindi fulani. Sijui nani ni nani. Sijui mwingine ananiambia Rai. Rai Nani? Hapana hiyo haiwezekani,” President Ruto said in Swahili loosely translated as “Do not be worried, I am alert to make sure everything will be okay. No one will meddle. Do not be worried about someone coming to talk to us. Someone was telling me Rai. Who is Rai? No, that is not possible.”
