How Mumias Sugar bosses brought firm to its knees

Nairobi governor Evans Kidero. PHOTO | FILE
Nairobi governor Evans Kidero. PHOTO | FILE 

Dr Evans Kidero and his successor as Managing Director at Mumias Sugar, Mr Peter Kebati, ignored repeated calls by auditors and the company’s board of directors to seal gaping corruption loopholes, concludes a damning audit of the troubled miller.

A draft forensic report by audit and consulting firm KPMG blames management teams under the two former bosses of blatantly disregarding information from auditors that there existed massive abuses of procedure which needed fixing.

“We noted that Mumias Sugar Company’s internal auditors, external auditors and the board of directors consistently notified management of non-adherence to policy and procedure and gave recommendations, which should have been acted upon,” reads the report.

Non-compliance with policies and suggested changes, said the KPMG report, exposed Mumias to potential loss of substantial revenue.

“However, management never undertook to implement the recommendations suggested or enforce compliance with the policies suggested (by internal, external auditors and board of directors),” said KPMG.

It gives shocking accounts of how successive management teams connived at every turn in all departments, creating and exploiting loopholes that exposed the publicly listed company to massive losses.

Almost every process at the company — from procurement, sugar importation and commercial divisions — was deliberately abused for the benefit of individuals, says the report.

The audit report provides a preview of the chief architects and faces behind the current sorry state of previously western Kenya’s economic giant.

Current Nairobi Governor Kidero is listed among individuals with the greatest responsibility for the losses at the country’s largest miller during his decade-long reign as managing director.
Others are his successor Peter Kebati, who also worked under Dr Kidero, and the acting commercial director, Mr Peter Hongo.

Others adversely mentioned by the forensic audit that was commissioned by the current board of Mumias Sugar are Mr Paul Murgor, who was commercial director under Mr Kebati’s four-year reign as managing director.

Ms Emily Otieno, previously company secretary, and who was sacked alongside Mr Kebati and Mr Murgor, is also at the centre of a series of operational errors that left the miller bleeding.