Pillow talk rocks Mumias Sugar Company – Weekly Citizen

Rumours doing rounds in Mumias town are that a newly appointed senior manager of the financially crippled sugar factory has employed his wife as secretary in his office. The move has been received with mixed feelings and condemnation from farmers and locals who term it as hypocrisy of the highest order. “Is this allowed in a company where the government and other stakeholders have a majority of shares or is Mumias Sugar Company a private entity?” a farmer posed. On September 24 last year, Kenya Commercial Bank, a major creditor to Mumias Sugar appointed Ponangipalli Venkata Ramana Rao of the Tact Consultancy Services as the receiving manager of the distressed company as the company was shut for over one year due to huge debts and lack of sufficient raw materials. The new manager is said to have entered his office with gusto, exhibiting utter arrogance as farmers wonder how he will turn the once pride of Western Kenya to regain its glory after it was brought down to its knees through companies like Kabilo Farm, then owned by late Lonhro East Africa chairman and nominated MP Mark Too.

Ramana Rao

“How can you appoint your wife as your secretary in a government institution? How will he execute his duties professionally and genuinely in front of his wife who is now his secretary will all the time be eavesdropping all over?” an employee who talked to Weekly Citizen asked. Only recently, MSC was taken over by KCB who are also shareholders in the company as its receivers. The removal of former CEO Nahashon Aseka’s plunged the company in financial crisis as the company could wait no longer before Treasury could then allocate any funds for its recovery initiative. The then CEO together with board chairman Kenneth Ngumbau had been spearheading the process. KCB then appointed a receiver-manager to run the debt-ridden company over default in loans the bank had provided to the firm. This is when PVR Rao was appointed as the receiver-manager to run the firm until the funds owed are recovered in full to give Mumias a clean bill of health. The company is yet to fully pay dividends, if any, in eight years to farmers while its share price has been declining over the years. On top of that, Mumias has defaulted on loan repayment to its creditors amounting to a whopping Sh12.5 billion.

Nahashon Aseka

So far, it is estimated that Mumias owes KCB Sh545 million, Eco bank Kenya Sh2 billion, French Development finance institution Proparco Sh1.9 billion, National Commercial Bank of Africa Sh401 million, Treasury Sh3.1 billion, Kenya Sugar Board Sh1.6 billion while bank overdraft from various financial institutions amount to Sh2.7 billion. The government, with 20pc shareholding had bailed out the firm to the tune of Sh3.5 billion which did little to revive the sugar miller. In October last year, William Ruto said the government would cede its shareholding in the troubled company to the county government of Kakamega under Governor Wycliffe Oparanya. The government’s decision to transfer its shares was seen as a big support to the county government’s efforts to revive Mumias Sugar after it had pumped Sh200 million towards the same efforts. Therefore, it will give the county government representation on the board of the sugar firm to ensure that one of its flagship factories in the county does not sink. KCB then appointed Francis Wabuke as the general manager in acting capacity.

Wycliffe Oparanya

This came after the miller was placed under receivership in September last year to protect its assets and to the best extent, maintain its operations. Since then, it has been under the leadership of Ponangapalli Venkata Ramana Rao as the receivermanager. Wabuke is a former employee of the Booker Tate Company, an international agricultural production and processing consultancy firm who are the founders of Mumias Sugar Company. The company was set to revive milling in January 2020 after carrying out repairs and maintenance of the factory after the takeover by KCB.