New twist in Mumias lease battle as firm threatens fresh suit
The bidding process for Mumias Sugar Company (MSC) has been cast in doubt, in the continuing absence of the miller’s current valuation.
The giant miller, Kenya’s largest, is debt ridden and has attracted eight firms to run the company on lease. As of 2018, the company’s liabilities stood at Sh30.1 billion against assets of Sh15.7 billion.
Out of the eight, New Mumias Sugar- Devki group- was the highest bidder with Sh61.9 billion, while Sarai Group was the lowest with Sh5.8 billion. Others are West Kenya with Sh36 billion, KE International (28.6 billion); Kruman Finances (Sh16.8 billion); Pandal industries (Sh7.9 billion); Kibos Sugar Sh6.4 billion) and Ugandan based Sarai Group (Sh5.8 billion).
The leasing of the company to the Sarai Group has caused disaffection, with some bidders considering the process to be flawed in the absence of the current valuation of the company.
West Kenya has joined other disaffected groups. Yesterday, Raymond Olendo, a lawyer with Oraro and Samba Advocates, representing West Kenya said they will also challenge the process in court.
“The bare minimum we expect is for the receiver manager to give the current value of the company. Otherwise our position is that the process should start all over again,” he said.
Olendo, who placed the value of the company at between Sh20 and 30 billion said they expect the receiver manager to announce the value of the company tomorrow.
Given the lease The High Court has since suspended further leasing of the miller’s properties pending the hearing and determination of a suit filed by Kakamega County on January 25.
Justice Winfridah Okwany said there is a lot of interference on the revival of the company after Sarrai Group was given the lease last year
The company was placed under administration by KCB Group in 2019 after the miller defaulted on loans totaling Sh12.5 billion, and appointed consultancy firm PVR Rao to take over the Nairobi Securities Exchange-listed firm’s operations. –