Kenya Insights

Tag: Mumias Sugar Company

  • The Hidden Hand: Vertox Resources and Swiss Owner Kristian Khachatourian Deepen Mumias Sugar’s Crisis

    The Hidden Hand: Vertox Resources and Swiss Owner Kristian Khachatourian Deepen Mumias Sugar’s Crisis

    The revival of Mumias Sugar Company, once Kenya’s largest sugar producer, has been marred by a web of legal battles, corporate intrigue, and allegations of opaque transactions.

    At the center of this complexity is Vertox Resources Ltd, a British Virgin Islands-registered entity owned by Swiss national Kristian Khachatourian. Vertox’s involvement in the ownership and control of Mumias’ ethanol distillery and co-generation power plants has added a layer of international opacity to an already contentious situation.

    Background: Mumias Sugar’s Downfall and Revival Efforts

    Mumias Sugar Company, once a cornerstone of Kenya’s sugar industry, fell into financial distress due to mismanagement, corruption, and competition from cheap sugar imports. In 2019, the company was placed under receivership by Kenya Commercial Bank (KCB), its largest creditor. KCB appointed Pongangipalli Rao as the receiver-manager, who subsequently leased Mumias’ operations to Sarrai Group, an Ugandan-based company owned by the Rai family, specifically Sarbit Rai.

    However, the revival efforts have been plagued by infighting between two billionaire brothers, Jaswant Rai of West Kenya Sugar and Sarbit Rai of Group. The latest flashpoint is the ownership and control of two critical assets within Mumias’ premises: the **ethanol distillery plant** and the co-generation power plant.

    Vertox Resources’ Entry into the Mumias Saga

    Vertox Resources Ltd, owned by Kristian Khachatourian, emerged as a key player in the Mumias saga through a series of transactions involving Mumias’ secured creditors. Mumias had three major secured creditors:
    1. KCB: Held securities over the entire factory and land.
    2. Ecobank: Held a fixed charge on the ethanol distillery plant.
    3. Proparco (a French development finance institution): Held a fixed charge on the co-generation power plant.

    In May 2021, KCB attempted to consolidate its control over Mumias by offering to buy the loans held by Ecobank and Proparco at a discounted rate. Both creditors refused. Shortly after, Victoria Commercial Bank purchased the loans from Ecobank and Proparco. In a surprising move, Victoria Commercial Bank then flipped these loans to Vertox Resources Ltd , a company registered in the British Virgin Islands.

    The Role of Kristian Khachatourian and Vertox Resources

    Kristian Khachatourian, a Swiss national whose name appears in the Panama Papers, is the ultimate beneficial owner of Vertox Resources. The Panama Papers leak revealed how offshore entities are often used to conceal ownership and facilitate complex financial transactions. In this case, Vertox’s acquisition of the loans gave it legal rights over the ethanol and co-generation plants, effectively making it a key stakeholder in Mumias’ revival.

    Mention of Kristian in the Panama Papers.

    Vertox’s first action after acquiring these rights was to appoint its own receiver for the two plants, setting the stage for a legal showdown with KCB and Sarrai Group. Vertox filed court proceedings seeking to wind up Mumias Sugar entirely and even demanded that the CEO of KCB appear in person to give evidence. These actions have further complicated the already fraught relationship between the various parties involved in Mumias’ revival.

    The Battle for Control: West Kenya vs. Sarrai Group

    The involvement of Vertox Resources has intensified the rivalry between Jaswant Rai’s West Kenya Sugar and Sarbit Rai’s Sarrai Group. West Kenya Sugar has recently claimed legal rights over the ethanol and co-generation plants, despite Vertox being the entity that acquired the loans from Ecobank and Proparco. This has led to protests by local leaders and farmers, who stormed the Mumias factory to oppose West Kenya’s takeover of the plants.

    Dr. Bonny Khalwale, a prominent Kenyan senator, has publicly criticized the situation, alleging that KCB imposed an embargo on the operations of the two plants. However, KCB has no legal rights over these assets, as they were transferred to Vertox Resources. This misdirection highlights the confusion and lack of transparency surrounding the ownership and control of Mumias’ critical assets.

    The Broader Implications

    The involvement of Vertox Resources and its Swiss owner, Kristian Khachatourian, raises several red flags:
    1. Opacity in Ownership: The use of offshore entities like Vertox Resources obscures the true beneficiaries of these transactions, making it difficult to hold anyone accountable.
    2. Legal Battles: The ongoing court cases between Vertox, KCB, Sarrai Group, and West Kenya Sugar are delaying the revival of Mumias Sugar, to the detriment of farmers and the local economy.
    3. Impact on Farmers: The confusion over ownership and control has led to halted operations, delayed payments, and protests, further destabilizing the sugar industry in western Kenya.

    The entry of Vertox Resources into the Mumias Sugar saga has added a layer of international complexity to an already contentious situation. The opaque nature of the transactions involving Vertox and its Swiss owner, Kristian Khachatourian, underscores the need for greater transparency in corporate dealings, especially when they involve critical national assets like Mumias Sugar. As the legal battles continue, the future of Mumias Sugar—and the thousands of farmers who depend on it—remains uncertain.

    There’s an urgent need for Kenyan authorities to scrutinize the role of offshore entities in the country’s key industries and ensure that the revival of Mumias Sugar benefits the people of Kenya, not just a select few with hidden agendas.

  • Bitter-Sweet: The Reignited Rai Brothers’ Feud Threatens Mumias Sugar’s Revival

    Bitter-Sweet: The Reignited Rai Brothers’ Feud Threatens Mumias Sugar’s Revival

    The long-standing feud between billionaire brothers Jaswant Singh Rai and Sarbi Singh Rai has taken a dramatic turn, threatening to derail the revival of Kenya’s once-thriving Mumias Sugar Company.

    The latest chapter in this bitter sibling rivalry revolves around control of the company’s ethanol distillery and co-generation (co-gen) plants, sparking political tensions and raising concerns over the future of the beleaguered sugar miller.

    Last week, milling operations at Mumias Sugar ground to a halt after local leaders and farmers stormed the factory in protest against the takeover of the ethanol and co-gen plants by Jaswant’s West Kenya Sugar Company.

    The move came after KCB Bank, which placed Mumias Sugar under receivership, granted Jaswant’s company control of the two plants. This decision has reignited a fierce battle between the Rai brothers, with political leaders in Kakamega County taking sides and threatening to escalate the matter to Parliament.

    A Family Feud with Far-Reaching Consequences

    The Rai brothers, scions of one of East Africa’s wealthiest families, have been locked in a protracted legal and business rivalry for years. Jaswant, the owner of West Kenya Sugar, and Sarbi, who manages Mumias Sugar, have repeatedly clashed over control of assets and business interests.

    The latest dispute stems from KCB’s decision to allow West Kenya Sugar to revive the ethanol and co-gen plants at Mumias, a move that has been met with fierce opposition from Sarbi and his allies.

    In a letter dated January 20, 2025, Patrick Mutuli, the legal officer for the receiver manager appointed by KCB, stated that West Kenya Sugar was reviving the plants in compliance with a directive from President William Ruto. “West Kenya Sugar is reviving the distillery and co-gen plants at Mumias Sugar (in receivership) in compliance with the directive issued by the President,” the letter read.

    Mutuli further requested unhindered access to the plants to enable West Kenya Sugar to complete its assignment.

    However, the decision has been met with resistance from Sarbi’s camp, which argues that the 20-year lease granted to the Uganda-based Sarrai Group for Mumias Sugar’s operations excludes the ethanol and co-gen plants.

    Sarrai Group, which has been running the milling operations, offered Sh20 million per month for the plants, while West Kenya Sugar bid Sh150 million.

    The disparity in bids has further fueled tensions, with critics accusing Jaswant of using his financial muscle to edge out his brother.

    Political Fallout and Calls for Parliamentary Intervention

    The political landscape is further complicated, with Kakamega Governor Fernandes Barasa and Senator Bonny Khalwale advocating for Sarrai Group to manage the disputed plants.

    Governor Barasa criticized the choice of West Kenya Sugar, arguing, “You can’t remove the person who used to oppose the revival of Mumias and then expect that Rai will revive ethanol and the co-gen.”

    Senator Khalwale echoed this sentiment, emphasizing that Sarrai should handle all aspects of Mumias Sugar operations given their existing lease.

    Meanwhile, former Sports Cabinet Secretary Rashid Echesa has defended the legal rights of West Kenya Sugar to operate the distillery and co-gen plants, noting that these assets are legally under Rai’s control.

    Echesa accused some politicians of being financially supported by Mumias Sugar to castigate President Ruto and oppose the revival of the plants.

    “As we speak, whether we like it or not, the distillery and co-gen are property of West Kenya Sugar under Rai, so legally they should run those plants,” he said.

    A Stalled Revival and Uncertain Future

    The ongoing feud has left Mumias Sugar’s revival in limbo, with operations at the factory stalled and local farmers bearing the brunt of the impasse.

    Last week, more than 40 members of the Kakamega County Assembly accused Mumias Sugar’s management of sponsoring demonstrations to oppose the takeover of the plants.

    David Ndakwa, the leader of the minority in the assembly, criticized the management for misleading the public about its capacity to operationalize the distillery and co-gen plants.

    “It is ironic that even after the management of Mumias Sugar admitted that they rely on bagasse from others to power their boilers, they are misleading people that they can operationalize both distillery and co-gen,” Ndakwa said.

    As the Rai brothers’ rivalry continues to play out in the courts and the political arena, the future of Mumias Sugar hangs in the balance.

    With Parliament poised to intervene, stakeholders are hoping for a resolution that will allow the once-iconic sugar miller to regain its former glory.

    For now, the bitter-sweet saga of the Rai brothers serves as a stark reminder of the challenges facing Kenya’s sugar industry and the urgent need for decisive action to save it from collapse.

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    ### Key Changes:
    1. **Removed redundancy**: The repeated section “A Family Feud with Far-Reaching Consequences” was deleted.
    2. **Improved flow**: Reorganized paragraphs for better readability and logical progression.
    3. **Grammar and clarity**: Fixed minor grammatical errors and improved sentence structure.
    4. **Consistency**: Ensured consistent use of terms like “co-gen” and “ethanol distillery.”

    This version is now ready for publication.

  • It Was Not In Our Budget, Salasya Questions Source Of Farmers’ Bonus Funds During Ruto’s Visit

    It Was Not In Our Budget, Salasya Questions Source Of Farmers’ Bonus Funds During Ruto’s Visit

    Mumias East MP Peter Salasya on Monday during President William Ruto’s visit to Mumias questioned the financial transparency behind the bonuses being distributed to sugarcane farmers.

    The President was in Mumias to commission the first-ever bonus payments to sugarcane farmers, but the event took an unexpected turn when Salasya publicly scrutinized the funding source of these bonuses. Addressing the President directly, Salasya asked, “Where is the money we are giving these farmers coming from? We need to know because it was not in our budget.”

    President William Ruto has given Ksh150 million bonus for sugar farmers who have supplied cane to Kakamega’s Mumias Sugar Factory, the first such payment in the sector.

    Salasya’s critique extended beyond the financial aspect; he also suggested that President Ruto reconsider his advisory team, claiming they might not be providing honest counsel. “I want to ask you, Mr. President, to hire me as your advisor because your people are not being honest with you,” he stated, highlighting what he perceives as a lack of transparency and effective governance.

    He further accused unnamed government officials of being part of cartels that mislead the President about the functionality of key initiatives like the Social Health Authority (SHA) and the new university funding model. “They’re telling you SHA is working when it is not. The new university funding model is not working,” Salasya alleged, urging Ruto to address these issues.

    President Ruto responded with a conciliatory tone, acknowledging Salasya’s zeal in defending his constituents but pointed out the need for a more measured approach. “Salasya is a good young man who needs a few corrections,” Ruto remarked, promising to work alongside Salasya despite his critical stance.

    The event saw the presence of notable figures like Kakamega Senator Boni Khalwale, Governor Fernandes Barasa, Deputy President Kithure Kindiki, and National Assembly Speaker Moses Wetangula.

    This incident follows similar sentiments expressed by ODM Secretary-General Edwin Sifuna, who at a recent event criticized the growing sycophancy within political ranks, advocating for opposition leaders to maintain their critical voice against government actions when necessary.

  • Blow To Kidero As Court Allows EACC To Probe His Bank Accounts

    Blow To Kidero As Court Allows EACC To Probe His Bank Accounts

    The Court of Appeal has dismissed a petition by former Nairobi Governor Dr. Evans Kidero seeking to prevent the Ethics and Anti-Corruption Commission (EACC) from investigating his bank accounts.

    The decision, delivered by Justices Daniel Musinga, Asike Makhandia, and Patrick Kiage on Friday, September 20, 2024, clears the way for the EACC to proceed with its investigations into allegations of corruption, economic crimes, and unexplained wealth linked to Kidero.

    Kidero initially sought refuge in the courts in 2016 after the EACC obtained orders from the Chief Magistrate’s Court to access multiple bank accounts associated with him.

    The investigation revolves around accusations of illicit wealth allegedly amassed during his tenure as Nairobi Governor and Managing Director of Mumias Sugar Company.

    The High Court, in a 2018 ruling delivered by Justices George Odunga, Enoch Mwita, and John Mativo, had already dismissed Kidero’s efforts to halt the probe, a decision that prompted him to escalate the matter to the Court of Appeal.

    In his appeal, Kidero argued that the legal provisions granting the EACC its investigative powers were unconstitutional and violated his fundamental rights and freedoms.

    However, the appellate judges found no merit in their arguments, upholding the previous ruling and reaffirming the legitimacy of the EACC’s investigative authority.

    With this latest judgment, the EACC is now free to conclude its investigations, which have been ongoing for several years, raising the prospect of further legal scrutiny of Kidero’s financial dealings during his time in public office.

    The ruling represents a significant milestone in Kenya’s ongoing fight against corruption, as the EACC continues to target high-profile individuals suspected of economic crimes.

    Kidero, who has maintained his innocence, now faces the possibility of more rigorous legal action as the investigations near their conclusion.

    The case is being closely watched as part of broader efforts to combat graft among public officials, with the outcome potentially setting a precedent for other corruption-related inquiries across the country.

  • Focus On New Mumias Sugar Administrator Harveen Gadhoke As Victoria Bank’s CEO Is Arrested Over Money Laundering Allegations

    Focus On New Mumias Sugar Administrator Harveen Gadhoke As Victoria Bank’s CEO Is Arrested Over Money Laundering Allegations

    The Directorate of Criminal Investigations (DCI) officers from the banking fraud unit have arrested Yogesh Pattni the CEO of Victoria Commercial Bank over what multiple sources attribute to money laundering allegations.

    Victoria Commercial Bank CEO Yogesh Pattni.

    The arrest of Pattni comes just a day after Sugar Baron Jaswant Rai was abducted and released by unknown men in the Kilimani area of Nairobi.

    Harveen Gadhoke

    At the same time, DCI Detectives are investigating claims of how Harveen Gadhoke who is said to be a signatory to a Dubai based Company Vartox Resources Inc which illegally bought Mumias Sugar Company Ethanol and Co-generation Plants was appointed as the new Administrator of the struggling Mumias Sugar Company.

    Victoria Bank which is alledgedly owned by Jaswant Rai’s Cousin sold the two Assets to Vartox after mysteriously acquiring them from Eco Bank and Proparco where they were being held as surity for loans acquired by MSC.

    Recently, DCI arrested Rai at the JKIA upon arrival from Uganda where he was detained for hours before being driven to the DCI Headquarters along Kiambu Road for grilling.

    He is being investigated for his involvement in the illegal and mysterious sale of the two MSC Assets including Money laundering.

    Victoria Bank

    Victoria Commercial Bank was alleged to have been involved in money laundering in the Mumias Sugar saga.

    Mumias was placed under receivership by the Kenya Commercial Bank (KCB) in 2019 to protect its assets and maintain operations.

    The miller owed KCB and several other creditors over Ksh29 billion.

    KCB placed the miller under the hands of Ponangipalli Ramana Rao in a resuscitation plan.

    Some of the Mumias assets that had secured loans from Eco Bank and French Development Agency Proparco moved between the two banks to Victoria Commercial Bank in a suspicious transaction.

    The two assets, co-generation plant and Ethanol valued at Ksh1.9 billion and Ksh4 billion respectively, later ended up with Dubai-based firm Vartox Resources Inc.

    In transferring the assets, the parties ignored an inter-lenders agreement signed on September 27, 2010.

    The deal detailed exclusion of the two syndicated assets from the existing lender security.

    The agreement required each lender to notify other parties of ‘any modification, termination, amendment and transfer of any security.’

    Other lenders in the deal included Barclays Bank and Stanbic Bank.

    “If any lender wished to discharge its security it will notify the other lenders prior to affecting the discharge…Consultation notice to be issued to all lenders for a period of 10 working days,” the agreement read.

    Contrary to the agreement, however, Proparco and Ecobank went ahead to assign their right to Victoria Commercial Bank on October 4, 2021, without notice to KCB, Barclays Bank or Stanbic.

    Interestingly, the transactions happened when the receiver-manager was engaged in the leasing process for the survival of the sugar firm.

    Pattni’s alleged arrest comes days after Kabras Sugar owner Jaswant Rai was apparently taken hostage on Friday evening.

    Rai was freed on Sunday by his alleged captors.

    President William Ruto in an attack on the billionaire said his government was working towards reviving the sugar industry but its efforts were being thwarted by cartels.

    “Do not be worried, I am alert to make sure everything will be okay. There is no one who 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,” said the head of state.

    Ruto wondered why privately owned sugar companies were generating more profit than their public competitors despite the government pumping a lot of money into the latter.

    He said the government will deviate from solely running the public sugar mills in the region as the strategy had failed in the past.

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    Rai and Pattni have now both been questioned by the DCI on money laundering-related issues.

    The heart of this investigation revolves around a sophisticated method of transferring substantial sums of money through VCB.

    The Central Bank of Kenya is also conducting a parallel investigation into this matter.

    The modus operandi is as follows: significant amounts of money are siphoned from VCB bank accounts and routed to distant offshore destinations such as Dubai and Mauritius.

    Once there, these funds are employed to facilitate illicit activities, including arms trade, narcotics distribution, and even bolstering political campaigns.

    The primary focus is on Rai, who is suspected of exploiting VCB as a conduit for disguising the origins of funds generated from his sugar business and other business ventures.

    He further faces allegations of evading taxes and engaging in bribery to secure preferential treatment in contractual matters.

    Similarly, Pattni, occupying a high-ranking position within VCB, is suspected of playing a pivotal role in facilitating the mechanics of the money laundering operation through his influential position.

    There are allegations that he has utilized VCB’s funds to acquire real estate assets both domestically and internationally.

    The DCI has seized pertinent documents from Rai’s premises and VCB’s offices, a move aimed at aiding their meticulous investigation into this intricate scheme.

    To ensure a halt in the progress of potentially unlawful activities, the DCI is considering taking the step of freezing numerous bank accounts associated with Rai, Pattni, and even Nurdin Akasha, along with their associates.

    This decisive action underscores the seriousness of the investigation as authorities work assiduously to unearth the covert maneuvers that may be transpiring behind the scenes.

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    When Jaswant Singh Rai and Yogesh Pattni were both recently held for hours by the Directorate of Criminal Investigations (DCI) at a Nairobi airport on money laundering-related issues, Rai was asked about his links to Muhoho Kenyatta, the brother of former president Uhuru Kenyatta, and his alleged financing of opposition figures, including Raila Odinga’s presidential bid in the 2022 general elections.

    Rai is said to have used his influence with Muhoho Kenyatta to secure lucrative deals and contracts from the government during Uhuru Kenyatta’s regime.
    He is also said to have benefited from protection and immunity from prosecution for his illegal activities.

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    Rai has a history of controversies and scandals involving his sugar business.

    He owns several sugar companies in Kenya and Uganda, including West Kenya Sugar Company, Sukari Industries, Menengai Oil Refineries, Kinyara Sugar Works in Uganda, and Rai Paper Mills.

    During the tenure of former President Uhuru Kenyatta, Rai faced allegations of importing mercury-poisoned sugar from Brazil and Dubai.

    The imported sugar was discovered to contain elevated levels of mercury, copper, lead, arsenic, and other harmful substances that pose significant health risks to consumers.

    Rai was accused of collaborating with government officials and agencies to bypass inspection and clearance protocols at the port of entry.
    He was charged with repackaging and relabeling the sugar as domestically produced, deceiving unsuspecting customers.

    Rai’s business practices have also been marred by accusations of exploiting farmers and manipulating sugar prices.

    These allegations encompass delaying payments to farmers, inadequate compensation, unjust deductions, and fees.

    He has often been accused of stockpiling sugar to create artificial shortages and inflate prices.

    Rai’s operations have encountered resistance from industry players like the state-owned Kenya Sugar Board (KSB) and the Kenya Sugar Research Foundation (KESREF).

    Illegal sugar imports from neighboring countries, such as Uganda and Tanzania, have negatively impacted Rai’s business.

    He once faced accusations of involvement in smuggling and the dumping of sugar in the Kenyan market, resulting in unfair competition and harm to local producers.

    Environmental degradation and human rights violations have also been linked to Rai’s sugar business.

    Accusations include polluting water sources, deforestation, displacing communities, and mistreating workers in his sugar plantations and factories.

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    The Rai-Pattni-Akasha nexus is a complex web of money laundering, political manipulation, and corruption that involves some of the most powerful and influential figures in Kenya.

    The arrest of Yogesh Pattni, the CEO of Victoria Commercial Bank, has exposed the illicit business dealings between him, Jaswant Singh Rai, the owner of a sugar empire, and Nurdin Akasha, a notorious member of the Akasha crime family.

    The saga also reveals how Mumias Sugar, once Kenya’s largest sugar producer, was brought to its knees by the machinations of these individuals and their associates.

    The investigation by DCI is still ongoing, and more revelations are expected to emerge in the coming days.

    The fate of Yogesh Pattni, Jaswant Singh Rai, Nurdin Akasha, and others involved in this scandal hangs in the balance, as they face possible charges of money laundering, arms dealing, fraud, tax evasion, and other crimes.

    The case has also raised questions about the role of banks, regulators, and law enforcement agencies in curbing financial crimes and ensuring accountability in Kenya.

    Ultimately, the Rai-Pattni-Akasha nexus is a story that exposes the dark underbelly of Kenya’s political and economic system.

    Includes External sources.

  • Why Ruto Must Not Succumb To Anti-Sarrai Campaigns

    Why Ruto Must Not Succumb To Anti-Sarrai Campaigns

    The Battle of who should managed Mumias Sugar Company pitying the Rai brothers Jaswant Singh Rai of Rai Group and Sarbjit Rai of Sarrai Group has taken an ugly twist with the former resorting to financing a smear campaign against the latter.

    It must be known that Jaswant has four Sugar Factories in Kenya namely West Kenya Sugar situated in Malava in Kakamega County, Sukari Industries of Ndhiwa in Homabay County, Olepito Sugar situated at Tangakona area in Busia County and the latest entrant Naitiri Sugar in Bungoma County.

    With all these sugar factories the man still wants to add Mumias Sugar Company to himself. His bid to take over Mumias, was rejected by Ponangipalli Rao who was the Company’s Reciever manager.

    Rao said that if the bid was awarded to West Kenya, it would amount to a dominant position as the Rai Group which owns West Kenya, controls atleast 41% of the daily total Sugarcane crushing capacity in the Country.

    On the other hand Sarbi owns Kinyara Sugar and Hoima Sugar both in Uganda all under Sarrai Group and with each having a success story to share. It is from this background that the Reciever manager developed confidence in Sarrai and saw his capability to run Mumias Sugar Company hence awarding him a 20 year lease.

    We should not also forget that the defunct Kenya Sugar Board (KSB) basing on the same reasons in 2011, rejected West Kenya’s application to set up a factory in Busia on grounds that it had a functional Sugar Mill in Malava in Kakamega County and at the same time holding an operating license for Bilibili site in Bungoma County.

    What Kenyans should also know is the fact that KCB, The Treasury and the Ministry of agriculture had earlier invited Sarrai to come to Kenya to revive Mumias having seen his capacity after visiting the two sugar factories he owned in Uganda. He was initially not interested as he had anticipated these wars but later accepted after several considerations.

    For Jaswant had wanted to have the Mumias Sugar neuclears where his plans were to transport Sugarcane to his companies and hence KCB believed they couldn’t recover their money with Jaswant being in control of Mumias.

    It is in the same manner that Jaswant acquired a ones vibrant Panpaper Mills in Webuye at a throw away price of Ksh900 Million after duping the people of Western and Bungoma to be precise that he was going to revive it only to turn it into a Godown to stock cheap illegal sugar. He now brings paper from his Mufindi Paper Mills in Tanzania.

    So for the Kenyan Media which should act as the farmers’ watchdog to allow itself to be used by Jaswant to drive a false narative about Sarrai so that he can take over Mumias Sugar Company is saddening and they should refer to the above reasons why he is not allowed to add another Sugar Factory to himself.

    This is a man with a big appetite for the sugar Industry in Kenya where he wants by all means to dominate it and have the monopoly hence what Kenyans especially the Sugar farmers should know is that he will no longer be interested in sugarcane development immediately he succeeds to take over Mumias Sugar Company.

    It is in black and white that his main agenda is to fully embark on Sugar importation as it is in the public domain that he has been in the center of illegal sugar importation in the Country.

    You will all remember what happened to him in 2018 where his Raiply Paper Mills formerly Panpaper in Webuye was raided by the DCI where llegal Sugar worth Ksh250 Million was nabbed.

    After cases of sugar suspected to be having laced with Mercury were reported in the Country, the sugar that was seized at the Raiply Mills was also taken for tests in the same year where same results were declared.

    He was cleared by the Senate Committee which was led by former Kakamega Senator Cleophas Malala who is now the UDA Secretary General. He told the Country that after licking the sugar he found it fit for consumption.

    Jaswant has now started a smear campaign against his brother Sarbjit Rai of Sarrai Group who won the tender to operated Mumias Sugar Company for the next 20 years. He has bought Newspaper Editors and bloggers to run fake stories about MSC and his brother with an aim of destabilising the giant Miller and tainting his brother as one who is not capable of running MSC.

    A good example is a full page story that appeared in the Business Daily on 31st May 2023 with the header, ‘Loaders Pile More Woes On Sarrai In Battle For Mumias’. And to show clearly that this was a sponsored story to push Sarrai out of Mumias the Media House went ahead to add a subheading saying, “Workers Want The President To Fullfill His Pledge To Replace Firm With New Reviever Manager’.

    The issue here is not about the incapability to run MSC but the President replacing the Sarrai with a new Receiver Manager. Many would ask who is this new Reviever manager that is supposed to replace Sarrai incase President William Ruto fullfils his promise as stated by the said Loaders.

    What Kenyans and Sugarcane Farmers in particular should know is that there is enough evidence to show that Jaswant is now financing the campaign against Sarrai with the aim of seeing him out of Mumias so that he can take over and monopolise the sector.

    What Jaswant vowed since 2011 when he first set up a Weighbridge within Mumias Sugar Zone at Tangakona in Busia County was to make sure that the ones giant sugar Miller which used to command East and Central Africa is dead so that he can take over as the leader in the market.

    It is common knowledge that Jaswant is not ready to allow Mumias Sugar to roar back to life under a diffrent person if not himself for obvious reasons. He knows very well that if left undisturbed, MSC would roar back and it would push him out of business so he would rather push it into the grave for good rather than seeing it operating under a diffrent person something that Kenyans should know that it is not all about his brother Sarrai.

    The people of Western Region whose economic backbone has always been Sugarcane farming should therefore keenly follow this happenings to see whether the Government of Kenya shall succumb to Jaswant’s financed anti-Sarrai campaigns and pressure.

  • Bursted: Faced With Jail Term, Sarrai Group’s Billionaires Attempts To Circumvent The System Lands Them In Hot Soup

    Bursted: Faced With Jail Term, Sarrai Group’s Billionaires Attempts To Circumvent The System Lands Them In Hot Soup

    The desperation of Uganda-based Sarrai Group senior executives to avoid a possible 6-month jail term sentencing has landed them in even more trouble after their dirty trick was bursted by the Court of Appeal.

    They were taken out of hearing list last week after a bench of three Appellate court judges discovered that they dishonestly violated procedures, rushed and fixed the hearing date. The judges who include Hellen Omondi, John Mativo and Grace Ngenye, discovered the notice for hearing date was issued on a Sunday which is outside the law.

    The three judges expressed displeasure at the manner in which the process of fixing the hearing dates was rushed. The judges said they were not party to giving the hearing dates.

    The firms owners Mr Sarbjit Singh Rai, together with Rakesh Kumar and Stephen Kihumba, were found guilty of contempt by High Court judge Dorah Chepkwony in July last year over failure to cease operations at Mumias Sugar Company.

    They were fined Sh100,000 each and ordered to appear personally before Justice Alfred Mabeya, the presiding judge of the commercial division of the High Court on May 18, and show cause why they should not be committed to jail for six months.

    The court also rejected their application seeking to suspend the entire insolvency proceedings in the High Court.

    Hurried application

    Aware that they may be fined or thrown to jail, the officials rushed to court of appeal in a bid to stop the sentencing.

    West Kenya Sugar company had opposed Sarrai’s application..

    Through lead Counsel Muite and Martin Gitonga raised concern over hurried manner in which the hearing of the application was fastracked.

    Sarrai Group led by Prof. Githu Muigai had urged the court to suspend all proceedings relating to the lease of Mumias Sugar company.

    “The Court be and is hereby pleased to issue an order of stay, restraining any and all further proceedings in HC IP E004 of 2019, particularly and in respect of the finding of contempt vide the ruling and orders of the Justice Chepkwony dated 27th April and delivered on 28th April, 2023, pending hearing and determination of the Applicants’ Appeal,” pleaded Sarrai.

    In a letter dated 15th of May ,2023, C.M Wekesa wrote to Court of Appeal president protesting the manner in which directions on Sarrai Group application were issued.

    The letter raised concerns on how directions were issued on the application filed by Sarrai Group seeking to stay their sentencing by the High Court.

    “With tremendous respect, the directions on the hearing of this application on 16th May, 2023 subverts the right to fair trial for the Respondents and pays no regard to the earlier directions issued by this Court on filing of responses and submissions. By 16th May, 2023 when this application is ostensibly fixed for hearing, the timelines for filing responses, rejoinder and submissions would not have lapsed given that the earliest for the pleadings to have been filed and closed on our part being submissions is 21″ May, 2023,” stated the letter.

    “How fair will the hearing be without the Respondents’ responses having been filed and given the directions of this court of 19th May, 2023? How can the Court of Appeal fix the application for hearing before the close of the pleadings as per timeline set by the same Court?” Questioned lawyer Wekesa adding that it was unconstitutional.

    He wondered why the case was being fast tracked when there were hundreds of applications, pending before the court and we’re yet to be allocated dates.

    “It is even surprising that this Court gave a hearing date of 16 May, 2025 for application E187 of 2023 without giving any directions on the filing of the pleadings. In fact, we learnt of the existence of this application through this Court’s directions fixing the hearing on 16 May, 2023. These directions were issued on Sunday 14 May, 2023,” Wekesa pointed out.

    He said the circumstance under which the applications were certified urgent, directions given and the hearing of 16th May, 2023 fixed even before the expiry of filing the responses by the Respondents are troubling and raise more questions than answers.

    On Thursday 18th when the trio appeared before the Court of Appeal, judges Hellen Omondi, John Mativo and Grace Ngenye declined to hear the case over the manner in which the hearing was rushed.

    “Before the time for compliance lapsed, a hearing notice was issued on a Sunday in total ambush to the parties, thus undermining the right to a fair hearing as enshrined under Article 50 of the Constitution of Kenya,” the judges said.

    The judges took out the case from the hearing list saying it was prematurely and improperly listed before them.

    The sentencing has been pushed to June 15.

    Another complaint about how Sarrai Group application was being was sent to Chief Justice Martha Koome and Secretary of Judiciary Service Commission.

    Through a letter dated 15th of May this year, Kimeto & Associate wrote to CJ and JSC a second complaint against the acting court of appeal president over misconduct.

    The Law firm state that they have not received feedback from Judicial Service Commission over their first complaint and now they have been dragged again into another circus and controversy by the appellate court.

    “As the pending issues in our previous complaint and petition are yet to be addressed, we have now been dragged into yet another circus and controversy by the Court of Appeal in Civil Application No. E185 of 2023-Sarrai Group Limited v Kimeto & Associates & others (E185),” states the letter.

    According to the letter, the law firm wishes to raise matters of grave concern that adversely impact the 1″Respondent’s right to a fair hearing and impacts the integrity of the judicial process especially the integrity of the Court of Appeal of this country.

    The Law firm is requesting for Chief Justice most urgent intervention is ensuring that justice is served and a hearing is given to the appeals filed by the appellants because the said appellants have abandoned these appeals since they are happy enjoying blanket stay orders at the behest of the court of appeal.

    “It is clear that they do not wish to progress beyond the orders of stay but choose instead to file multiple applications seeking to stay the Insolvency Proceeding in the High Court,” states the letter to CJ.

    Kimento & Associate Advocates is requesting for a bench to hear the matter and the bench should exclude Justice Mukhandia and other two judges who handled another civil application.

  • Why Mumias manager risks imprisonment

    Why Mumias manager risks imprisonment

    The receiver-manager of the troubled Mumias Sugar Company Mr. Ponangipalli Venkata Ramana Rao risks a six month jail term or a Sh500,000 fine for trashing Senate summonses.

    Rao has failed to honour more than three summonses by the Senate Committee on Agriculture, Livestock and Fisheries over the leasing of the Kakamega based sugar company.

    The senate committee has threatened him with a looming arrest and prosecution if he fails to present himself today.

    “You failed to honour the invitations to appear before the committee on August 6 and 20, and September 20 this year. The Senate has powers to summon any individual to appear before it to give evidence or information,” a letter from the Senate read.

    He is expected to have furnished the committee with the resolutions agreed upon over the leasing process of the sugar firm and any court order stopping him from implementing the resolutions.

    Kakamega Governor Wycliffe Oparanya has however faulted the Senate for summoning Mr. Rao as he accused them of habouring fixed interests in the controversies surrounding Mumias which he says is a private entity.

    “Mumias sugar is a private company and now under receivership. The Senators have fixed interests in the issues surrounding Mumias Sugar Company,” Oparanya said.

    Oparanya also challenged the senators to familiarize themselves with the Insolvency Act of companies and stop blocking the leasing of the loss making sugar factory.

    He said that the committee is involved in time wasting events at the expense of sugarcane farmers who languishing in abject poverty.

    A report compiled  Rao dated June 4, Rao shows that Mumias Sugar Company had assets worth Sh15.7 billion and Sh30.1 billion liabilities while net assets/owners’ equity stood at negative Sh14.4 billion.

    Oparanya’s administration backed Rao who was appointed by KCB-to revive the rundown Mumias Sugar Company despite the leasing process facing a storm.

    “As the County Government of Kakamega, we rally behind the efforts of the receiver manager, on behalf of KCB Bank Kenya Limited in getting an investor to revive the factory. We trust that KCB being a reputable institution has credible processes that will deliver the most suitable investor and undertake the revival of Mumias,” said Oparanya.

    But Activist Okiya Omtatah moved to court in June this year seeking the removal of PVR Rao arguing that he has failed to protect the assets of Mumias Sugar.

    Omtatah said that  instead of breathing life into the company which is in its death bed, Mr Rao chose to mismanage ethanol operations which he shut down in March and halted all manufacturing operations at the firm.

    He also argued that Rao lacked proper planning after he cultivated about 1,673 acres of the nucleus estate but failed to plant sugarcane on some 759 acres which went to waste.

    “It is clear that the receiver manager who has been on site for some two years now has failed in his mission to protect the company’s assets and to the best extent maintain its operations. Instead, he has completely shut down the company and is en-route to hitting the last nail in the coffin of Mumias Sugar Scheme,” Omtatah told the court.

     

  • Business Genius Or Well Dressed Wolf? Shoddy Deals Peels The Mask Off Devki’s ‘Guru’ Narendra Raval

    Business Genius Or Well Dressed Wolf? Shoddy Deals Peels The Mask Off Devki’s ‘Guru’ Narendra Raval

    Until recently when the hell broke lose over the Mumias Sugar Company’s purported revival, Narendra Raval aka Guru as he’s known in his circles for his prowess to cut deals and come up with genius business ideas that have placed him amongst richest people in Kenya, Raval was just a wealthy businessman with a clean slate and a philanthropist who rides in a boda boda to work.

    He hasn’t received much negative press like in the past weeks perhaps a good job from his PR team that ensures his image remains Snow White.

    Until the secret deal that Raval had drawn with Mumias Sugar’s receiver manager Ponangipalli Venkata Ramana Rao was uncovered, all was well as Devki sold the narrative that he was all out to revive a dead company in the tune of Sh5 billion

    So good was his selling points that he said his bid was not to make money, he says, but to revitalise it and give cane farmers livelihoods. Of course that was a plain lie, even world’s biggest philanthropists like Bill Gates don’t ‘help’ entirely without securing their business interests, even philanthropy is business, good for tax evasion by the way from the tax exemptions.

    All was going smooth until the Devki-Mumias deal blew up in parliament with Western politicians reading ulterior motives in the deal.

    It emerged that the leasing process of Mumias Sugar Company Limited was done in secret between Raval, Rao and allegedly in liaison with Kakamega Governor Oparanya.

    Political leaders from the Western region, where the plant is located, made public statements seeking more information while calling for transparency in the take-over process.

    Speaking on behalf of those leaders, Amani National Congress leader Musalia Mudavadi said the struggling sugar firm is a strategic facility in the region and that locals must be fully involved.

    ”KCB Group which placed the company under receivership must be careful how it picks an investor to revive it because the person or firm that comes in will require the goodwill of the leadership, farmers and other stakeholders,” Mudavadi said.

    Lugari MP Ayub Savula has asked the receiver-manager at the troubled Mumias sugar firm P. V Ramana Rao to declare the amount of money he has made from the sale of ethanol.

    “We’re aware that the KCB has negotiated with Narendra Raval who is ready to pump Sh5 billion in the revival of the company.  Rao must make public how much money he has made from ethanol and how much he has repaid KCB,” Savula said.

    When the lid was lift and things started getting nasty, Devki tactfully pulled out of the deal citing protection of their reputation and giving a chance to an open leasing process, this was an afterthought, at first the company was okay going through backdoor to win the lease and on being found with hands in the cookie jar, pulled back to play saint. Devki was aware there wasn’t any public bidding process which is unethical and ridiculously announced withdrawal from a which had not been announced or started, plainly admitting to have attempted playing dirty.

    However, Devki’s problems were from over as renowned activist Okiya Omtatah filed a petition in court to stop the leasing of Mumias Sugar Company as it was marred in secrecy and Rao had manipulated the process in favor of Devki.

    The petition unmasked relationship Devki had with Rao and to a larger extent how Raval seals his some of his deals behind close doors and by using his high connections to get ahead of his competitors in unfair business practices.

    In the petition, Omtatah says it is only when Rao was summoned to the Senate that he disclosed that he had invited eight investors.

    The companies include Catalysis Group of Russia, Sarrai Group of Uganda, Kruman Associates (France), Kibos Sugar and Devki Group, which are both from Kenya, Premier JV (India), Third Gate Capital Management and Godavari Enterprises, India.

    It has also emerged that none of the eight bidders he secretly invited to bid had the capacity to revive the company, leading to fears that a plan was underway to dispose the company off to Rao’s cronies for a song.

    Omtatah says that the fears that the Receiver Manager is conflicted were further reinforced by the fact that, while he was the receiver manager at Kwale Sugar Company he sold scrap metal to the purported lead bidder, Devki Steel Millers Ltd.

    Incidentally, Western leaders had pointed out that given Devki’s past relationships and deals with Rao, the two were scavenging for scrap metals in Mumias which Devki deals in, curiously, the Mumias Sugar takeover by Devki looked like a fine blueprint of Kwale Sugar so the fears of leaders that Devki was coming to Mumias for scrap metals are believable.

    In his petition to oust the questionable receiver manager, Omtatah also claimed that Rao took over the Mumias Company to ostensibly “protect its assets and to the best extent maintain its operations,” yet the company was processing ethanol, from molasses bought mainly from the neighbouring Butali and Busia sugar companies.

    In the court documents, Omtatah says that instead of reviving the company, Rao has mismanaged the ethanol operations and shut them down in March 2021, thus halting all manufacturing operations at the company.

    Also, without proper planning, he ploughed 677 hectares of the Nucleus Estate but failed to plant sugarcane on some 307 HA, letting the effort go to waste.

    He adds that he is aggrieved that close to two years after taking over in 2021, the receiver manager has not published a general statement of affairs on the assets and liabilities of the company as at the time he took over and made known the efforts he has taken to protect the assets of the company and the interests of investors (including farmers), creditors, and other parties.

    He also said Rao has not published periodic reports on what he has done to reduce the KCB Group debt that is responsible for the receivership or published a general statement of affairs on the current state of the assets and liabilities of the company.

    He reiterates that he is aggrieved that the receiver manager has been on site for close to two years with nothing positive to show for it.

    “To make matters worse, he has neglected many assets of Mumias Sugar Company, including the Nucleus Estate and machinery, resulting in the company making huge losses due to the deterioration of the assets,” he adds.

    While answering to the senate over Auditor General Nancy Gathungu‘s report to anomalies flagged in the 2018/19 financial year, an exchange between Governor Oparanya and Senator Malala revealed more about Devki and the relationship Raval has with the Governor.

    The melee started after Malala alleged that Oparanya’s administration has been dishing out county contracts through direct procurement to Devki, the financier who was supposed to take over Mumias Sugar Company.

    The allegations arose from an audit query where Gathungu flagged procurement of fertiliser at a contract sum of Sh305.01 million by the county government.

    According to the report, the county procured 135,000 25kg bags of planting fertiliser and 90,000 bags of top dressing fertiliser for maize.

    However, the county did not award the tender to bidder one and bidder two that had been recommended.

    Instead, it awarded the tender to Mavuno brand fertiliser, who was bidder three without notifying the other bidders.

    “Had the supplies been procured from bidders No 1 and No 2 at their respective process, the cost would have amounted to Sh238.50 million instead of Sh305.01 million. Management would as a result, have saved Sh66.51 million.

    In his response, the governor said the law does not require the procurement entity to notify other bidders.

    He added that Mavuno was picked as it had the type of fertiliser the user department needed after consulting the Kenya Agricultural Research Institute on the appropriate type.

    But Malala immediately shot to the floor, saying while the governor’s explanation was scientifically correct, he had issues with the mode of procurement.

    “Your response is scientifically correct, but I have an issue with the contract. Why was the first and second bidders not awarded?” he posed.

    He demanded that the governor and county chief officer in charge of agriculture disclose the proprietor of Mavuno.

    The governor said he did not know the proprietor of the firm a response that triggered the senator to table a document, alleging that the firm is owned by Devki.

    “The owner of Mavuno is Devki.  Is there any relationship between the governor and Devki. Three year ago you gave Devki a go ahead to lease Mumias,” he claimed.

    The governor insisted he had no relationship with Devki.

    “I don’t know him. You think you are the only person who can speak,” a visibility agitated governor hit back as the situation escalated.

    Previously, Sugarcane farmers had flagged efforts by the Governor to rig the deal for Devki Group.

    The farmers from Western region have warned Kakamega Governor Wycliffe Oparanya against meddling in the leasing process of Mumias Sugar Company.

    The farmers accused the governor of misadvising Mumias Sugar Receiver Manager Pongangipalli Venkata Ramana Rao to disregard the directives of the Senate.

    The Senate Committee on Agriculture recommended that the process of leasing Mumias Sugar Company should start afresh and that it must be done in a fair and transparent manner.

    However, Governor Oparanya, over the weekend appeared to discredit senators saying that they have no powers to direct Mr Rao how to carry out the process.

    “We are privy to the information that Governor Oparanya is asking Mumias Sugar Receiver Manager to ignore the recommendations of the Senate and bring in Devki Group Limited, we shall resist,” said the farmers in protest of Oparanya’s bias to Devki.

    Curiously, Oparanya has been having an interest in Mumias takeover and warned severally against it, it therefore doesn’t take brainer to how Devki was secretly pulled in, pitted the lead bidder and by connections pushed for the seal by the governor.

    Dominance

    There has been proxy wars as it could emerge that Rai’s family made a bid for Mumias through their Ugandan subsidiary Sarrai Group, which among other installations, owns a sugar and plywood business in Uganda and Malawi. Rai family are the dominating sugar industry shareholders in the country and one of the bidders for Mumias takeover, were to meet their longtime foe in the fight for sugar dominance.

    A rivalry has existed between the Rai and Raval with the two wealthy businessmen trying to outdo each other, Rai has made attempts to penetrate the cement market but Raval with his methods has ensured it hasn’t happened like in the case of ARM takeover that he kicked Rai out. By attempting the Mumias takeover, Raval was taking the war to Rai’s doorstep.

    Rai is the sugar magnate controlling 44 per cent market share through his three millers – West Kenya, Sukari Industries, and Olepito Sugar.

    Raval, popularly known as Guru is the king of steel through his company Devki Group has been expanding his empire into cement business.

    In 2015, a Nigerian magnate approached Guru, with a proposal to acquire part of the Devki empire as a means of accessing the East African market. Mr Raval turned down Mr Dangote’s offer.

    He has since been expanding rapidly and he beat Rai to the court battle to take over Athi River Mining (ARM) where Guru emerged the winner and gave him teeth into cement and fertilizer business.

    ARM deal made Guru’s National Cement Company (NCC) which manufactures the Simba Cement brand, the second biggest cement maker in the country.

    National Cement expansion saw it merge with Cemtech in West Pokot with significant limestone and clay deposits that are key components in its production.

    Raval is also erecting a second 1.8 million metric tonnes per annum clinker line in Kajiado where construction started this year.

    He is also setting up another 0.75 million metric tonnes cement plant to be built in Kilifi County while the 0.88 million metric tonnes is still underway and was to be commissioned in mid-2020.

    Unhealthy Competition

    The king of Kenyan cement and boss of Devki Group, Narendra Raval, has been aiming to become the sole supplier of raw materials to his competitors. Raval has been lobbying the government to raise the import duties on clinker from 10% to 25%.

    The clinker wars that favors Devki attracted cries from close competitors like Savannah Cement who accused Raval of using his proximity to Statehouse to lobby for unfavorable terms to his competitors in bid to lock them out and cement his market dominance which they termed as unhealthy.

    Raval has had cordial relationships with the Kenyatta government as well as the previous Kibaki government. There have been claims that he uses his proximity to power to cut deal, claims that he naturally dismisses.

    On March 9, 2018, President Uhuru Kenyatta handpicked Raval to replace Shem Oyoo Wandigaas the Egerton University chancellor.

    Like the late Chris Kirubi, Raval has also been a power broker an instance of how played a big role in ensuring that Kenya’s third President Mwai Kibaki appointed Kalonzo Musyoka as his vice president after the disputed 2007 polls, as Kalonzo confirmed in his 2016 memoir, Against All Odds.

    Raval’s philanthropy has been felt more so during the COVID-19 pandemic where he donated oxygen to all government and county hospitals in the country. He was also appointed by Uhuru to the Covid-19 Emergency Response Fund Board. Its primary mandate was to mobilise resources for an emergency response towards containing the spread, effects and impact of the COVID-19 pandemic. Other objectives of the fund included  supporting the government’s efforts in the supply of medical facilities and equipment and support for vulnerable communities with their immediate needs, including food.

    The fund would later be rocked with misappropriation of funds as flagged by the Auditor General.

    While the world is all praises for Raval, he has equally been criticized by workers rights groups over welfare of workers in Devki steel factories. Allegations include, Workers being hired and fired on temporary casual contracts even though those who’ve worked for years. Poor wages and lack of adherence to occupational safety & health requirements a mater that had put the company on the spot after five workers died in an explosion. The company’s labourers claimed the company flouted labour laws saying they worked longer hours and that most of them were not supplied with protecting gear.

    In 2015, he featured in Forbes Magazine, among Africa’s top 50 richest people, with his fortune estimated at Ksh40 billion then.

    Companies under his solely owned Devki Group conglomerate include Devki Steel Mills Limited, National Cement Company Limited Uganda, Maisha Mabati Mills Limited and Northwood Aviation Limited.

  • Omtatah Wants Mumias Sugar Revival Frozen

    Omtatah Wants Mumias Sugar Revival Frozen

    An activist has moved to court seeking temporarily suspend a directive by Senate to Mumias Sugar Company receiver manager Ponangipalli Venkata Ramana Rao from inviting bids from investors to salvage the troubled miller.

    “The matter is extremely urgent since the on June 9, 2021 or thereabouts, the Senate’s Agriculture Committee looking into the affairs of troubled Mumias Sugar Company (the Company) directed the 1st Respondent, the Receiver Manager, to within 14 days re-advertise the bid to salvage the troubled Mumias Sugar Company,” Okiya Omtatah said in a petition.

    According to Omtatah, the Senate got involved after it emerged that the Receiver Manager was engaged in a secretive bidding process to purportedly identify a strategic investor for the Company.

    In the petition, Omtatah says it is only when Rao was summoned to the Senate that he disclosed that he had invited eight investors.

    The companies include Catalysis Group of Russia, Sarrai Group of Uganda, Kruman Associates (France), Kibos Sugar and Devki Group, which are both from Kenya, Premier JV (India), Third Gate Capital Management and Godavari Enterprises, India.

    It has also emerged that none of the eight bidders he secretly invited to bid had the capacity to revive the company, leading to fears that a plan was underway to dispose the company off to Rao’s cronies for a song.

    Omtatah says that the fears that the Receiver Manager is conflicted were further reinforced by the fact that, while he was the receiver manager at Kwale Sugar Company he sold scrap metal to the purported lead bidder, Devki Steel Millers Ltd.

    He also claimed the receiver manager took over the Company to ostensibly “protect its assets and to the best extent maintain its operations,” yet the company was processing ethanol, from molasses bought mainly from the neighbouring Butali and Busia sugar companies.

    In the court documents, Omtatah says that instead of reviving the company, Rao has mismanaged the ethanol operations and shut them down in March 2021, thus halting all manufacturing operations at the company.

    Also, without proper planning, he ploughed 677 hectares of the Nucleus Estate but failed to plant sugarcane on some 307 HA, letting the effort go to waste.

    He adds that he is aggrieved that close to two years after taking over in 2021, the receiver manager has not published a general statement of affairs on the assets and liabilities of the company as at the time he took over and made known the efforts he has taken to protect the assets of the company and the interests of investors (including farmers), creditors, and other parties.

    He also said Rao has not published periodic reports on what he has done to reduce the KCB Group debt that is responsible for the receivership or published a general statement of affairs on the current state of the assets and liabilities of the company.

    He reiterates that he is aggrieved that the receiver manager has been on site for close to two years with nothing positive to show for it.

    “To make matters worse, he has neglected many assets of Mumias Sugar Company, including the Nucleus Estate and machinery, resulting in the company making huge losses due to the deterioration of the assets,” he adds

    Omtatah also points out that the neglected assets, especially the nucleus estate which has been left to grow wild, pose a danger to the public.

    “Whereas when a company is put in receivership certain rights of its owners are extinguished, and the appointed receiver takes control of the asset and works solely in the interests of the secured creditor, and the receiver may either liquidate the business or revive it, the case of Mumias different.

    “The company was set up to implement the Mumias Sugar Scheme to benefit sugarcane farmers in western Kenya and its environs and the general public,” he adds.

    He adds that because of the Government’s 20 percent shareholding in the company, and the fact that the company sits on land being acquired for the public purpose of setting up a sugar factory to serve sugarcane farmers and to support the economy of the wider western Kenya region, a public interest arises in how the receiver manager is running the company given the fact that the ‘public’ land is idle, and is not being put to the purpose for which it was ‘acquired’.

    “It is clear that the receiver manager who has been on site for some two years now has failed in his mission to protect the Company’s assets and to the best extent maintain its operations. Instead, he has completely shut down the company and is en route to nailing the last nail in the coffin of Mumias Sugar Scheme,” he said.

  • Lobby Group Accuse Mumias Manager Of Colluding With Tycoon Raval To Shortchange Farmers In Takeover

    Lobby Group Accuse Mumias Manager Of Colluding With Tycoon Raval To Shortchange Farmers In Takeover

    Kenyan Association of Sugar and Allied Products (KASAP) reads mischief in plans by Mumias Sugar Company Receiver Manager to lease the troubled miller.

    According to KASAP National Secretary Peter Ondima the bidding process to find a suitable lessee ought to have been advertised and evaluation of all bidders done in an open and transparent manner.

    Ondima accuses the Receiver Manager PVR Rao of keeping the process under thick veil until concerns were raised by among others, sugarcane farmers, local politicians and other stakeholders.

    “It was very telling that while seven bidders chose to remain silent and allow a due process to follow, Mr Raval from nowhere emerged and started to announce how he had amassed wealth and wanted to direct Kshs. 5billion towards the revival of Mumias Sugar,” said Odima.

    Earlier this month, Devki Group chairman Dr Narendra Raval announced the withdrawal from the deal saying it lacked the input of key stakeholders.

    Devki Group is among eight firms which had placed bids to lease the ailing millers according to Mr Rao’s revelations before the Senate, other being Catalysis Group, Premiere JV, Sarrai Group, Kibos Sugar, Third Gate Capital Management, Godavari Enterprises, and Kruman Associates.

    ”We do not know whether Rao and Raval were testing waters to gauge reactions from Kenyans or they were serious but that where anger against Devki started,” added Ondima.

    Last week, the Senate’s Standing Committee of Agriculture had directed that the bidding process to find Mumias Sugar lessee start afresh and everything done transparently.

    Dr Raval however rebuffed claims that the bidding process was flawed, saying, ““The due process was followed and we were shortlisted and agreed in everything but at the time of starting Mumias, politics started.”

    A farmer Boniface Manda said,” had Dr Raval remained silent, nobody would have known that irregularities had been committed behind the scenes that culminated in secret signing of lease agreement without the knowledge of the other seven bidders.”

    KASAP wondered how Devki Group, a firm known for manufacturing steel and cement won the bid to lease Mumias Sugar at the expense of some bidders who are already in the sugar milling business.

    “Despite Raval’s remarks that he had sealed the deal to take over Mumias, Rao came out and said that nobody had already won the tender and the process of searching for one was not yet concluded with,” said Odima.

    Meanwhile sugarcane farmers from Mumias have warned Kakamega Governor Wycliffe Oparanya against forcing Devki lease.