BY SAM ALFAN.
KCB suffers setback as it’s administrator is removed from managing struggling Mumias sugar.
The ruling by High Court Judge Alfred Mabeya is a major win for west sugar company which is fighting for a larger control of the western region sugar belt.
The judge ruled that the lease is unlawful as it failed to cater for the interests of creditors.
The High court cancelled the Mumias Sugar Company lease issued to Sarai group and removes the KCB appointed administrator Ponangipali Ramana Rao and appointed Kereto Marima of KR Consult limited as the new administrator.
Court noted that leasing the sugar company for 20 billions meant that it would permanently remain an asset to kCB and would not be able to repay a single creditor.
In his ruling, Justice Mabeya found that he released the assets of the company to the lowest bidder, Sarrai holdings at Sh5.8billion and left out the highest bidder, West Kenya Sugar company limited that put a Sh36.7billion bid.
The court said that Rao was appointed by the Kenya Commercial Bank (KCB) and he appeared to serve the interest of the bank and not farmers or creditors.
The judge also said that he had not shown how he was going to pay the debt owed to farmers and creditors.
to be updated
