Mumias gets another receiver-manager to replace ousted KCB appointee
Intrigues at troubled Mumias Sugar Company continue to have deepen after another receiver manager was appointed to replace the KCB appointed receiver-manager who was sent packing last month.
Through a Gazette Notice, Mumias Sugar Company appointed Kereto Marima as administrator to oversee the running of the struggling miller.
“Pursuant to the regulations of insolvency act, notice of the appointment of administrators of the above company. The appointment of the previous administrator was revoked on April14, 2022,” the company in the latest gazette notice.
KCB had appointed PVR Rao as the receiver-manager in 2019 to run the firm until all funds owed to the lender are recovered in full following default in paying loans the bank had provided to the firm.
More than 60 petitioners including Dubai based Vartox Resources had gone to court in a push to oust Mr Rao as the administrator and his place taken by Mr Harveen Gadhoke of Adili Associates LLP.
The smaller creditors wanted an independent administrator who would look at the interest of KCB which is the main lender and also the welfare of all other stakeholders.
Mumias Sugar owes creditors Sh29 billion, nearly half of which is claimed by banks and other lenders like the Dubai based Vartox Resources. Farmers, workers and suppliers make up the other half of the miller’s debts.
The small creditors include Kimeto & Associates Advocates for representing the miller in court, Westlink Electrical and Hardware, Milicons, Victoria Furnitures, Stratec Binder GmbH, Liaison Group K ltd, Copy Cat and Sygenta.
This follows the suspension by the High Court of a decision cancelling the contract given to Uganda-based Sarrai group to run the ailing miller for 20 years.
Last week, Justice Dorah Chepkwony canceled the revocation of the 20-year lease after Sarrai moved back to court arguing that the company was judged without a hearing.
Sarrai further said Justice Alfred Mabeya, who canceled the lease and ordered the firm to leave Mumias Sugar premises immédiatement, granted the order, which was not sought.
During the ruling, Justice Mabeya also revoked KCB appointed receiver-manager PVR Rao as the administrator of Mumias Sugar in the April 14 ruling.
“That pending the hearing and determination of the case, a stay of execution and enforcement of the order…revoking, cancelling and nullifying the lease issued to the applicant and directing the applicant to forthwith vacate the premises of Mumias be and is hereby granted,” Justice Chepkwony said.
The judge kicked out Rao for mismanaging the leasing process by awarding the contract to the lowest bidder. “I find that the lease of Sh5.8 billion to Sarrai Group for 20 years was irregular,” Justice Mabeya said.