Revival of Mumias Sugar to be delayed for a further 6 weeks
The planned revival of the once giant miller Mumias Sugar Company will resume after 42 days.
This is because of sibling rivalry over the control of Rai’s multi-billion investment that has intensified over the leasing of Mumias Sugar after the High Court extended a six-week order barring Sarrai Group, owned by Sarbi Singh Rai, from reviving the struggling miller.
Justice Wilfrida Okwany ruling comes on the backdrop of an affidavit filed in court on January 25 questioning the transparency of the manner the bid was undertaken.
This comes even as the chairman of Rai Group, Jaswant Singh Rai, an elder brother of Sarbi, is being accused of attempting to grab the contract.
Jaswant, who owns the West Kenya sugar company which produces the Kabras Sugar brand, was the highest bidder with Ksh.36 billion compared to his young brother.
The Ugandan-based Sarrai Group is behind the production of the Kinyara Sugar and won bid to revive Mumias Sugar.
With the blame landing on receiver-manager Ponangipalli Rao for allegedly awarding the deal to the lowest bidder with Ksh.6 billion, Mr.Jaswant through his lawyer Paul Muite wants Rao summoned to explain how he arrived at Sarrai Group.
“How can you pick a company whose capacity is KSh 5.8 billion ($51.07 million), leaving the one with Ksh.36 billion ($317.04 million)?” Muite argued.
Kenya Commercial Bank (KCB) has also been urged to provide information on the same. The ailing miller was put under receivership by KCB in 2019.
KCB, however, maintains that the Rai Group lost a bid to Mumias on account of its dominance in the sugar industry.
The High Court dismissed the application to lift the orders barring Sarrai Group from reviving the miller, noting that the case was urgent and worthy of the orders to protect the subject matter.
Following the verdict, the County Government of Kakamega approached Senior Counsel James Orengo to seek the disqualification of Justice Okwany from the case.
Orengo objected to the six-week extension for the interest of the five farmers and shareholders to prepare for the trial as too long.
The five farmers include Lambert Lwanga Ogochi, Augustino Ochacha Saba, Prisca Okwanko Ochacha, Robert Mudinyu Magero, and Wycliffe Barasa Ng’onga.
Last week, the farmers obtained orders stopping any operations at the sugar milling plant after they filed a suit challenging the lease on the basis of not being transparent.