Why Mumias Sugar Will Not Start Operations Soon

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    An undated photo of Mumias Sugar company which was placed under receivership.
    File
  • Operations at the Mumias Sugar Company will have to wait a little longer after the High Court sitting in Kakamega blocked an earlier order allowing for the company's revival. 

    The County Government of Kakamega had on Tuesday, January 11, obtained an order allowing Sarrai Group to proceed with operations, despite another order to the contrary.

    However, High Court Judge William Musyoka vacated the order and faulted the county government for failure to disclose the existence of an initial order issued on December 29, last year suspending the leasing process.

    “That, the order of 29/12/2021 should have been disclosed by the applicant (county government) since it cannot possibly be in operation at the same time with the order that I made herein on 11/1/2022,” ruled Justice Musyoka.

    Ponangipalli Ramana Rao
    Mumias Sugar Company Receiver Manager Ponangipalli Ramana Rao during a press conference at the company's boardroom on March 4, 2020.
    The Standard

    Sarrai Group had been given the lease following successful bidding last year despite the company’s Ksh11.5 billion bid being the third highest.

    This prompted Tumaz and Tumaz Enterprises, which placed the highest bid (Ksh27.6 billion) to move to court challenging the leasing process. The company is linked to wealthy Kenyan businessman, Julius Mwale.

    Through lawyer Javier Munzala, Mwale argued that Mumias Sugar’s receiver-manager, Ponangipalli Ramana Rao, did not give the bidders an open and transparent opportunity, compromising the integrity, fairness, and accountability of the process.

    The court issued an order suspending operations at the miller until the matter is heard and determined. Nonetheless, Sarrai Group went on with operations at the defunct miller, prompting Mwale’s lawyer to file contempt proceedings against Rao and the owners of Sarrai Group.

    During the Bukhungu II political function in Kakamega, the Orange Democratic Movement (ODM) leader, Raila Odinga, presented Sarrai Group’s proprietors in what seemed to be an endorsement of the Ugandan firm and the revival of hope for cane farmers and workers.

    “We want to see Mumias back to its feet. When we started this process, Omondi (Kakamega Senator Cleophas Malala) and others went to court, which scared away the initial investor (Devki Group),” Raila stated.

    “Now we have a new investor, who I want to revive Mumias in less than six months. I welcome him and now hand him over to Governor Wycliffe Oparanya.”

    The miller is now set to remain silent at least for the near future, further denting hopes of it ever returning to its once vibrant stature.

    Raila Odinga
    ODM Leader Raila Odinga presents Sarrai Group proprietors to take over Mumias Sugar operations during the Bukhungu II rally in Kakamega on December 31, 2021
    Citizen Digital