The High Court has today revoked the 20_ year lease of Mumias Sugar awarded to Uganda Based Sarrai group and removed Ramana Rao as receiver manager and administrator appointing Kereto Marima as the new administrator.
The Ugandan firm Sarrai Group was further ordered to vacate Mumias Sugar Company premises and for RAO to hand over to the the new Reciever in an orderly manner within 7 days .
In a hard hitting judgement ,Justice Alfred Mabeya accused RAO of wanting to use Mumias as his retirement home.
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.
“Rao unwilling is suitor ..he’s conflicted as both as an administrator and receivership,”court noted
The judge observed that for RAO to allege tha he was appointed as an administrator to attend court proceedings was an insult to insolvency process he was running aways as an administrator..
“RAO shunned and went on to receivership and leases to Sarai…it’s conflicted and hurts creditors …,”court noted.
Lawyers Martin Gitonga,Paul Muite and Abass Ismail hailed today’s ruling saying that the Court has vindicated them noting West Kenya Sugar was the Highest bidder.
“We raised pertinent issues and the Court agreed with us .We have been vindicated.The Judge made scathing remarks in the conduct of the Reciever Manager and KCB,”Gitonga noted.
Ann Kimetto the creditor who moved to Court expressed her joy at the Court’s decision saying that today’s ruling will mark a new beginning of the revival of Mumias sugar.
Abass Ismail added that Mumias was bieng gifted away to foreigners to be cannaibalized
“Sarrai group wanted to ensure Mumias is perputally in debt wants to while Rao wanted Mumias as his retirement shceme,”he said
The Judge directed Rao to ‘formally and in an orderly manner hand over unrestricted access of Mumias’ to Mr Marima.
“The court hereby appoints Kereto Mirima of K consult Ltd.to nwnthe administrator of Mumias Forthwith,”court ruled.The new administrator should have full and unhindered control of Mumias,”Mabeya directed.
The new administrator has been directed to ascertain the claims made by creditors.
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.
