Court revokes Rao’s appointment as Mumias receiver manager
The High Court has revoked the appointment of Ramana Rao as the receiver-manager of Mumias Sugar Company citing non-compliance with the terms of the job.
This is after Justice Alfred Mabeya found that Rao had not acted according to the order of the court issued on November 19, 2021.
The court found that he released the assets of the company to the lowest bidder, Sarrai Holdings at Sh5.8 billion and left out the highest bidder, West Kenya Sugar company limited that put a Sh36.7 billion bid.
“Rao was appointed by the Kenya Commercial Bank (KCB) and he appeared to serve the interest of the bank and not farmers or creditors,” Justice Mabeya said.
The judge said that the receiver/cum administrator ought to have called a creditors meeting to ascertain the total amount of money owed by the company which he did not do.
Further, the court said that he had not shown how he was going to pay the debt owed to farmers and creditors.
Matela Malima was appointed as the new receiver manager and the lease issued to Sarrai holdings was cancelled as it was ordered to move out of Mumias Sugar Company.
The new receiver manager was directed to compute all assets and debts owed by Mumias sugar company within a period of 60 days and file the same in court.
Last month, farmers urged the High Court to remove Rao as the receiver-manager of Mumias Sugar Company after he failed to follow the orders of the court and that he was second-guessing the court’s order.
“From the affidavit he swore on his behalf and that of Kenya Commercial Bank (KCB), he is still evaluating the bids even up to now as the litigation is going on,” Lawyer C. M. W. Wekesa said.
He added: “That is contempt of court, he should have come to this court and sought variation of court orders and filed a detailed account. We have made out our case to have the receiver removed because of incompetence, unprofessionalism and fraud.”
The court also heard that Rao lacked transparency and accountability as he undertook to hold consultative meetings with all stakeholders including former employees, but did not do so.
It was also claimed in court that he had made attempt to approach four former employees of Mumias Sugar on 20th February, 2022 with a view of compromising their application before court.
CAPTION; Former Mumias Sugar Receiver Manager Ponangipalli Venkata Ramana Rao during a past press conference at Delta House in Nairobi on May 7, 2020.
