Companies

Court set to determine the fate of re-opened Mumias Sugar today

mumias

Entrance gate at Mumias sugar company. PHOTO | ISAAC WALE | NMG

The High Court will Thursday morning decide whether to shut down the just re-opened Mumias Sugar Company after allegations that the Uganda-based Sarrai Group, which took over the company has been stripping off the miller’s assets.

Justice Wilfrida Okwany said she will rule on the matter after hearing submissions from lawyer Jackline Kimeto, West Kenya, Vartox Resources Inc, among others arguing that Sarrai was taking advantage of the court order to vandalise the once giant miller.

“It has come to the applicant’s [my knowledge] knowledge that the 4th respondent company (Sarrai) is currently dismantling and vandalising machinery and striping away Mumias’ assets from the premises in clear exercise aimed at cannibalising its assets,” Ms Kimeto, a creditor of Mumias, said.

She urged the court to issue an order preserving all the assets of the miller and the Uganda-based company to cease any activities at the premises immediately. West Kenya’s Jaswant Rai through senior counsel Paul Muite said despite having cancelled the lease, Sarrai has remained in the premises and has been ‘carrying out illegal activities and exposing the assets to vandalism’.

“The continued possession and control of the assets of Mumias by Sarrai has created disorder in what would otherwise be a seamless administration by the court-appointed administrator, Mr Kereto Marima,” said Mr Rai.

The application was opposed by Sarrai arguing that the vandalism claims were not true and the company has employed over 300 workers at Mumias Sugar Company, in a bid to kick-start operations.

The company’s lawyer Wesley Gichaba told Justice Wilfrida Okwany that operations at the miller are on and it would be unfair to order Sarrai to cease operations as it will jeopardise the jobs and frustrate efforts of farmers who are delivering cane and those who have been contracted to make the supplies. “It is against public interest to stop Sarrai from operating the machinery,” he said.

KCB-appointed receiver manager PVR Rao through senior counsel Kiragu Kimani denied that the contested order illegally gave Sarrai Group the assets of Mumias.

“Yes the lease was cancelled but the order was suspended by the Court of Appeal. This means I remain the administrator of Mumias pending the ruling of the Court of Appeal,” Mr Rao said.

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