Damning revelations tabled at the High Court have revealed how Mumias Sugar Company Receiver Manager Ponangipalli Venkata Ramana Rao rejected a whooping Ksh36 Billion bid from West Kenya, the highest bidder in the leasing process, but controversially awarded Sarai Group Limited, a Uganda based business entity, with a minimum bid of only Ksh 5.84 billion. This means that the state miller consequently lost over Ksh30.2 billion through the transaction.
According to documents filed by West Kenya Sugar Company lawyer senior counsel Paul Muite, West Kenya Sugar Company was the highest among the six bidders with Ksh36 billion.
By paying the KCB loan at the rate of Ksh150 million each month for a total of 20 years, the bid amount by West Kenya would earn Mumias Sugar Company an excess balance of Ksh 33.3 billion.
In contrast, Sarai Group, emerged the lowest bidder with a distant Ksh 5.84 billion and would take a whole 124 years to pay at most Ksh28 million per month meaning that, the state miller will only have a balance of Ksh 3.1 billion in excess after KCB loan had been settled, which according to West Kenya Sugar Company, cannot in any way settle the debt owed by farmers, employees, suppliers and creditors from the state miller.
In addition, according to a sworn affidavit by West Kenya Sugar Company chairman Jaswant Rai, the Mumias Sugar Company Receiver Manager controversially and hurriedly awarded Sarai Group the Lease on 21st December 2021 and the Lease Agreement signed the next day on 22nd December 2021, thereby handing over the assets of the state miller the same day, which is against the laid down procedures of evaluation and approval by the Capital Markets Authority. In addition, the Competitions Market Authority was not involved in the leasing determination meaning that Mumias Sugar Company Receiver Manager went outside his mandate.
In addition, West Kenya Sugar Company is faulting the Mumias Sugar Company Receiver Manager for misleading the court and members of the public by stating that the company lacks capacity to run Mumias Sugar Company while it’s the leading Sugarcane Sugar Producer in the sugar sector in the country, with close to 90,000 tonnes production turn over annually.
