High Court revokes lease of Mumias Sugar to Sarrai Group

The High Court has revoked the lease of Mumias Sugar Company to Uganda based conglomerate–Sarrai Group that had been awarded a 20-year lease to help revive the sugar company.

The court also ordered for the immediate removal of Ramana Rao as the Mumias Sugar Company receiver manager and in place appointing Kareto Marima as the new administrator. This and more from the courts.

The New receiver manager is to compute all assets and debts owed by Mumias sugar company within a period of 60 days and file the same in court.

The five farmers, West Kenya Sugar Company and Mumias Outgrowers (1998) Limited went to court to challenge the leasing of Mumias Sugar Company to Sarrai Groupon grounds that it was undertaken in an opaque manner and awarded to the lowest bidder, Sarrai Group without regulatory approvals.

The farmers are Lambert Lwanga Ogochi, Augustino Ochacha Saba, Prisca Okwanko Ochacha, Robert Mudinyu Magero and Wycliffe Barasa Ng’onga.

The defendants in the case are Mumias Sugar Company Receiver Manager, Ponangipalli Venkata Ramana Rao, Kenya Commercial Bank (KCB) Limited, the Attorney General, Cabinet Secretary Ministry of Agriculture, Livestock and Fisheries, Competition Authority of Kenya, Sarrai Group Limited, Chief Land Registrar, County Government of Kakamega and Capital Markets Authority.

The farmers’ lawyer, Kibe Mungai had earlier in March reiterated that the lease was given to Sarrai Group yet there were higher bids on the table which could have ensured the indebtedness of Mumias Sugar Company is taken care of.

“The court in its ruling of November 19th, 2021 said courts cannot micro-manage the receiver manager and will allow the rules of commerce to settle the issue. To clear indebtedness is an issue of money. Rules that must apply recognize this is a capital economy. Why is Rao opposed to more being paid for Mumias? Whichever oligarch is to run Mumias must have a figure with many zeros,” he submitted.

Also read https://www.kbc.co.ke/high-court-set-to-give-ruling-on-mumias-court-case/