Mumias Sugar sacks top officials over illegal imports

Mumias Sugar Company has sacked its chief executive officer Peter Kebati and commercial director Paul Murgor after finding them culpable for illegal sugar imports that cost the listed miller Sh1.1 billion.

The sackings follow the presentation to the board of an audit by knowledge firm KPMG, which was contracted to investigate claims that senior executives of the company were discreetly importing sugar and repacking at as a product of Mumias Sugar for sale.

“The board after careful consideration of the nature and extent of the involvement of members of the management and the impact it has had on the company, both from a financial and a reputation point of view, has this morning (Monday) decided to terminate the services of the employees involved,” said board chairman Dan Ameyo in a statement on Monday.

He did not mention Mr Kebati and Mr Murgor by name but the Business Daily sources said the report had recommended the two be fired. The report will be released to the public at the company’s headquarters in Mumias on Tuesday.

The KPMG report also found the two managers guilty of abetting shipment of cheap sugar from Sudan.

“Evidence indicates that management made misrepresentations on a number of key facts to the Board. Management also acted contrary to the Board’s directive and without its approval and did not follow due process. The total series of transaction amounted to Sh1.1 billion,” KPMG found.

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The two had earlier been suspended for two-months pending investigations into their conduct. Mr Ameyo was flanked by six board members including the acting chief executive officer, Coutts Otolo.

Mr Ameyo said the sackings would help streamline the company’s management and restore its reputation. Other sources said more action would be taken against Mr Kebati and Mr Murgor.

However, Mr Kebati said he had not been informed of his sacking. “I’m not aware about my sacking. I will be able to discuss it in more detail when I get the information from the board,” he said.

Mumias’ sales plunged by nearly a quarter to Sh11.9 billion in 2013 compared to Sh15.5 billion a year earlier in what was linked to cheap sugar imports.

In March, Members of the Parliamentary Committee on Agriculture made an impromptu visit to a depot it said belongs to Mumias and discovered more than seven tonnes of imported sugar.

After the visit to the Shimanzi depot in Mombasa, the MPs recommended the sacking of the company’s entire management. The MPs said that more than 10,000 bags of imported sugar were at the depot.

Committee vice-chairman Kareke Mbiuki accused Mumias of giving preference to imported sugar, eroding the market for its genuine products.