Kenya Insights

Tag: Sony Sugar Company

  • Sony Sugar’s Shocking Procurement Scandal: Millions Lost in Insurance Tender Fiasco

    Sony Sugar’s Shocking Procurement Scandal: Millions Lost in Insurance Tender Fiasco

    In a disturbing revelation of mismanagement and potential corruption, Sony Sugar Company, already grappling with financial difficulties, has been embroiled in yet another procurement scandal. This time, the spotlight is on a tender for General Insurance, initially priced at KShs 41 million, which under the tenure of new Managing Director (MD) Martine Dima, was retendered and inflated to KShs 60 million.

    The tender, meant to extend over two years, was in its second year when MD Dima decided to upend the process, leading to a significant hike in costs. This decision not only strained the company’s already tight budget but also raised questions about the motives behind such a drastic financial decision.

    The move to retender was met with immediate legal challenge. The case was taken to the Public Procurement Administrative Review Board and then to the High Court of Kenya under case numbers Nairobi HCJR NO 127/2024 and Nairobi HCJR 128/204. Despite these efforts, the decisions were upheld, allowing the higher cost contract to proceed, much to the dismay of those advocating for prudent financial management within the company.

    What makes this case particularly egregious is the payment structure involved. Miran, the company awarded the new insurance contract, paid its legal representatives KShs 350,000. However, in an astonishing turn of events, Sony Sugar, under the instruction of MD Dima, disbursed a staggering KShs 6 million to the same lawyers. This payment, far exceeding typical legal fees, suggests a deeper level of collusion or mismanagement.

    Industry experts and observers have been quick to point out the absurdity of such financial decisions at Sony Sugar, especially given its known struggles. “To increase the cost of an essential service like insurance by nearly 50% while the company can’t even afford basic operational costs is not just poor management; it’s a direct plunder of company resources,” said James Mwangi, a procurement consultant who has followed the case.

    The scandal has not only financial but also moral implications for the staff and stakeholders of Sony Sugar. The company, which has been a significant employer in the region, faces further instability due to this mismanagement. Reports from posts on X (formerly Twitter) highlight public outcry, with users expressing frustration over what they perceive as yet another instance of corruption within the company under Dima’s leadership.

    Further investigations by Kenya Insights reveal that the decision to retender wasn’t just about securing a better insurance deal but appeared to be motivated by personal gains. The drastic increase in legal fees, especially from Sony Sugar’s side, suggests that there might have been kickbacks or other underhanded dealings at play.

    The Ethics and Anti-Corruption Commission (EACC) and other regulatory bodies have yet to comment officially on this matter, but given the scale and the implications, it’s anticipated they will launch an investigation. The Sony Sugar scandal is not isolated; it reflects a broader issue of procurement corruption in Kenya, where public and private entities often see tender processes manipulated for personal gain.

    As Sony Sugar continues its fight for financial recovery, this procurement scam adds another layer of challenge, proving detrimental to its already tarnished reputation and financial health. The community around Sony Sugar, including farmers and employees, are left to wonder if the company can ever recover from such governance failures.

    This case stands as a stark reminder of the urgent need for transparency and accountability in corporate governance, especially in sectors critical to the national economy.

  • SonySugar’s New MD Under Fire for Alleged Mismanagement and Extravagant Spending

    SonySugar’s New MD Under Fire for Alleged Mismanagement and Extravagant Spending

    Nairobi, Kenya – December 27, 2024

    SonySugar, the state-run sugar company that had been on a remarkable recovery trajectory, is now facing a significant downturn, with allegations of mismanagement leveled against its new Managing Director (MD), Martine Dima. The company, which saw its gross revenue jump from Sh400 million in 2019 to Sh5.132 billion in the 2022/2023 financial year, is now caught in a web of financial impropriety and questionable business decisions.

    Insider sources and anonymous customers have provided Kenya Insights with details of the MD’s lifestyle and business practices, which include the use of car hire services from a specific company in Kisumu, despite the availability of company vehicles. This car hire company, suspected to be owned by associates or proxies, charges SonySugar between Sh250,000 to Sh300,000 per week for taxi services alone, not including the MD’s personal per diems, which range from Sh100,000 to Sh200,000 weekly. Over six months, the MD’s expenses allegedly totaled over Sh3.5 million, a stark contrast to the Sh600,000 spent annually by his predecessor.

    Further allegations suggest that while the MD is frequently out of office, visiting Nairobi, Kisumu, and Nakuru, he engages with suppliers and customers, negotiating price cuts and entering into potentially fictitious contracts. Reports also indicate that he oversees several personal businesses in Nairobi, managed by his personal assistant and the chairman’s daughter, both employed by SonySugar.

    The MD, previously sacked by the Migori County Government for malfeasance, managed to bypass Chapter Six vetting of the Kenyan Constitution, allegedly through bribery, ensuring protection from the Board chairman, Ministry of Agriculture, Treasury, and other state organs.

    In another controversial move, the MD has been involved in a contentious legal settlement related to the case MIGORI HCCC NO.24 of 2015 NGINA GITIBA -VS- South Nyannza Sugar Company Ltd. Here, the court’s judgment, which many argue was based on erroneous calculations, awarded farmer Ngina Gitiba Sh62,868,771 for damages, including interest, for cane not harvested. Investigations have shown that Gitiba only had 5 acres under cane, and her legitimate claim was for Sh2,670,042.

    Despite advice from the company’s lawyer, Okongo Wandago, to appeal the decision, the MD chose to settle privately, agreeing to pay an inflated amount of Sh95,515,950. This decision has not only raised eyebrows but also led to accusations of financial misconduct, with the Devolution Human Rights Defenders Forum from Homa Bay writing to the Directorate of Criminal Investigations (DCI) to probe this deal.

    Critics argue that the court ignored the actual value of the cane and the costs incurred by SonySugar in assisting the farmer, leading to a judgment that overcompensated for what was harvested. The decision to pay this “fictitious” amount was made without regard for the ongoing appeal, further exacerbating the company’s financial strain.

    This series of events paints a picture of a company once on the mend now spiraling due to leadership that seems more focused on personal gain than organizational health. The community, stakeholders, and watchdog groups are calling for an immediate investigation into these allegations, demanding accountability and a return to ethical and profitable business practices at SonySugar.

    As this story develops, the focus will be on whether state authorities will take action to rectify these issues and restore SonySugar’s trajectory towards recovery and integrity.

  • How Fraudulent Lawyers Are Fleecing Poor Farmers In Trans Mara Sugar

    How Fraudulent Lawyers Are Fleecing Poor Farmers In Trans Mara Sugar

    In 2019, Kenya Insights blew up the cover of rogue lawyers who targeted poor farmers in Sony Sugar and made away with millions in a fake payment claim saga.

    Racketeers had been minting billions of shillings from millers in the sugar belt by filling cases using fake documents from unsuspecting farmers including those who died years ago.

    Investigations revealed that the racketeers had been altering contracts of the unsuspecting farmers to file cases in Rongo, Migori, Homa Bay, Kisii, and Kehancha towns.

    The company was receiving unusual payments claims from farmers. As a matter of resuscitating the sugar company, management contracted an investigating firm to establish whether these claims from lawyers were genuine.

    Sony Sugar looting is a classic case of obtaining money by false pretence contrary to section 313 of the penal code, forgery contrary to section 351 of the penal code and uttering a false document contrary to Section 353 of the Penal Code.

    The brief circumstances of the case are that South Nyanza Sugar Company Limited (SONY SUGAR COMPANY) officials reported that their company is experiencing enormous cases of embezzlement of funds. This is as a result of fake civil cases filed by advocates and using names of SONY SUGAR farmers (clients) without the farmers’ knowledge

    Investigations reveal M/s Odingo & Co. Advocates and M/s Kerario Marwa & Co. Advocates are adversely mentioned as the ones participating in this acts.

    There are over 50 law firms involved. In 2014 we had 5. Most these just came from Mumias Sugar Nzoia Sugar, and Chemelil Sugar.

    Records at the company’s’ registry and those at Migori Court registry indicate that several farmers’ names are being used to file fictitious civil cases without their knowledge. Some cases are pending before court and others have been awarded money but when interviewing the relevant farmers, they asserted that they had never met the said advocates, never filed any civil case neither have they received the award monies.

    In some instances, farmers who died as far back as 2013 are depicted to have risen from the dead to swear affidavits and file cases three years later which they won and were paid.

    In one case, a dead farmer filed two cases in the same court demanding to be paid because his cane had not been harvested. The cases were filed long after he was buried.

    In the two cases filed in May and June 2016, documents contain details for the same piece of land but show different dates on which the farmer allegedly executed the contract with the miller.

    The cases filed and signed by the Migori farmer, who died on March 25, 2013 and a burial certificate issued on March 29, 2013, are still pending in court. They appear to have been filed on the same day as the case numbers follow each other.

    In another case, relatives of farmer who died on September 3, 2013 at Tabaka Mission Hospital were shocked to learn that their father had filed a case in September 2017.

    His son has in turn sued the law firm which drew the controversial plaint accusing the lawyers of fraud. Investigators have also discovered another case where a farmer John Otieno Orwa filed a civil suit in 2015 and was ultimately paid Sh296,676.63 and later went to court in 2018, and is demanding payment for 32 tones of unharvested cane which he has valued at Sh3,500 per tone.

    The money paid out by the company to compensate bogus farmers was shared out by crooked lawyers and some Sony insiders who leaked vital documents and had in the past frustrated efforts to tame the runaway number of fake cases.

    Advanced Forensics Limited, the private investigator hired by Sony to probe the matter established the string of the fraudulent cases.

    The two Migori-based advocates Kerario Marwa and Samuel Odingo were charged at the Kisii Law Court with fraud and forgery. The case has stalled and hasn’t made much stride since 2019 in which is suspicious and could perhaps be a coordinated effort to frustrate the case.

    Trans Mara Sugar

    In a similar way and similar players, the racketeers have targeted neighboring farmers supplying Trans Mara Sugar.

    On realizing that they’ve been victims of an elaborate crime, farmers have moved to the DCI in Ogembo to have the lawyers investigated. According to OB Extracts of the farmers who reported the alleged fraud seen by Kenya Insights, Nelson Jura & Advocates, Ms Odingo & Co Advocates have been accused of forging documents and demanding money falsely in fraudulent lawsuits.

    Thomas ondieki Ositu case Migori CMC 1631/2016 filed by S. O. Odingo Advocates the farmer never met the lawyer neither gave him instructions to file on his behalf.
    Ezekiel Mauti Arori has 2 matters. Running parallel to the ALL IN MIGORI law courts. Viz: CMC 471/18 & 170 CMC 489/18 ?filling firm SO Odingo Advocates.

    Kenya Insights also reviewed another case where an entire  family (2bros&mother) allegedly had their particulars picked from who knows where and cases opened in MIGORI COURT. The three include Johnson ng’wono, Geoffrey Ng’wono and Mother Everlyne Nyamoita Ng’wono. NELSON JURA Advocate FILED all the MATTERS in Migori without the consent of the farmers in what is clearly a fraud scheme.

    The suit.
    Richard case filed by KERARIO MARWA & Co Advocates. Without instructions.

    There’s also another bizarre case of Stepheno Ongubo who had died on 5Th May 2015 according to report verified by Kenya Insights but miraculously woke up from the GRAVE in 2018 walked to the Advocates’ office then Swore and signed an affidavit on Sept 2018. KERARIO MARWA Is the advocate who filed it posthumously.

    These are just a few of the sampled cases, we have in our possession over 30 cases with similar pattern of theft by the lawyers.

    Its sad that such rogue lawyers who target poor farmers are allowed to continue practicing despite the hefty evidence and even after being charged. LSK and relevant bodies should not entertain such criminal elements to erode the legal profession. They should not only be struck out of practice but thrown to jail to serve as an example to similar schemers. For now we’re asking the DCI and ODPP to move up with speed to ensure the criminal elements are dealt with once and for all and anyone found to be helping them In coverup and frustrating the prosecution to be bundled with them as well.

    We shall keep you updated again.