Mumias Leasing Case Hearing Commences

Petitioners opposing the controversial leasing of Mumias Sugar Company Limited led by West Kenya Sugar Company senior counsel Paul Muite have termed the process ‘a well calculated 30 billion fraud executed between the receiver manager of Mumias Sugar Rao Ramana and Sarai Group limited from Uganda.

Appearing before Justice Alfred Mabeya, West Kenya Sugar Company senior counsel Paul Muite faulted the Mumias Sugar Company Receiver Manager Rao Ramana for claiming that West Kenya, the highest bidder with 36 Billion shillings stake, didn’t have the capacity of running the debt ridden state Miller that’s under receivership of Kenya Commercial Bank.

‘West Kenya was to deliver 900M upfront & additionally 500M as security bond together with 150M per month installment. So how can the receiver manager claim he doubted our capability?’ Paul Muite – West Kenya Sugar Company Lawyer.

In addition, the senior Counsel faulted Mr Rao by claiming that if awarded the Mumias lease, West Kenya Sugar Company would control 50% of the sugar sector. In contrast, Muite says West Kenya would only have a 21 % stake and not 50% as claimed by the Mumias Sugar Receiver manager.

‘West Kenya would have controlled 21% not 50% what was claimed by Receiver Manager. It’s mandate of Competitions Authority to evaluate performance.’ Paul Muite – West Kenya Sugar Company Lawyer.

West Kenya further urged the High Court to restrain from aiding an illegality orchestrated by Mr. Rao who never involved the company’s shareholders in the controversial & botched leasing process to Sarai Group.

‘As a result, Mumias Sugar Shareholders will be the biggest losers in the botched leasing process.’ Paul Muite – West Kenya Sugar Company Lawyer.

Lawyer Kibe Muingai, representing 5 farmers in the case who also oppose the controversial leasing of Mumias Sugar Company, questioned why the rewarding & subsequent take over of the company was done in a space of 24 hours and without the approval of the Competitions Authority of Kenya.

‘A decision is made on 21st by Mumias Receiver Manager and then on 22nd, just a day later, is awarded the lease. There was unusual hurry. Why was the hurry to dispose off Mumias property?’ – Kibe Muingai – Petitioner’s Lawyers

The farmers further told the court that there was an active court order barring the receiver manager from conducting any lease process at the time Sarai Group was controversially awarded the lease, and which Mr Rao ignored.

‘There was an existing court order that prohibited the lease process from proceeding, yet the Mumias sugar receiver manager ignored the instructions & acted in contempt, therefore the court should declare the process null & void.’ – Kibe Muingai – Petitioners’ Lawyer

It was further revealed that Sarai Group only deposited Ksh 60 Million Kenya shillings instead of the 120M it quoted before take over of operations.

‘Sarai paid 60M instead of 120M but still got the property. Sarai even went ahead to evict employees & Plough in the farms. Yet, the merger was supposed to be approved by the Competitions Authority of Kenya. This is an illegality.’ Kibe Muingai – Petitioners’ Lawyer

The petitioners jointly pleaded with the court to declare the controversial leasing process null & void since tax payers & Mumias Sugar Shareholders would lose 30 billion shillings as a result of the receiver manager controversially rejecting 36 Billion from West Kenya Sugar Company & accepting a mere 5.8 billion shillings from Sarai Group, which would be only paying 20 million shillings monthly installments as opposed to 150 million shillings installment assured by West Kenya Sugar Company.

The petitioners used the example of Transport Cabinet Secretary James Macharia who awarded the highest bidder in the ongoing construction of the Nairobi Express Highway, and not the lowest bidder.

‘It will take Sarai 20 years to fully pay its bid while it will only take West Kenya 18 months to settle. It doesn’t beat logic to award Sarai the lease’ Kibe Muingai – Petitioners’ Lawyers

‘Kibe: the handing over was supposed to be done after approval by the Competition Authority of Kenya (CAK). The properties were hurriedly handed over on the night of 22nd December 2021.’

Before the hearing commenced, Justice Alfred Mabeya rejected a petition by Mumias Outgrowers Company Limited seeking to have the Case on Mumias Sugar company Lease be heard by a three judge bench. The court ruled that there’s no substantial issues of law raised to warrant the case to be referred to CJ to empanel a bench.

“That in view of the scope and sensitivity of the matter and considering how the matter was transferred by justice Okwany for further directions by the presiding judge ,it’s prudent to shield the court from undue pressure by having the matter be heard by a three judge bench as opposed to a single judge,”

The defendants will respond to the petitioners submission on Thursday, 17th February 2022.