Creditor wants new administrator to manage collapsed Mumias Sugar

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

A Mumias Sugar Company (MSC) creditor has asked the High Court to appoint a new administrator to manage the collapsed miller.

Ms Jackline Kimeto says in the application to be heard on Friday that the term of Mr Kereto Marima, who was appointed the interim administrator by High Court judge Alfred Mabeya in April last year, has since lapsed.

Ms Kimeto, who is seeking more than Sh76 million from MSC said she is apprehensive that the assets of the once giant miller will be pilfered to the detriment of all creditors, who might never recover their debts.

“It has now become extremely necessary for the court to appoint a new administrator to secure the assets of the company and comply with the directions of this court issued on the 14th of April, 2022,” Ms Kimeto said in the application.

The court first appointed Mr PVR Rao as the administrator for a period of one year but his appointment was terminated on April 14, 2022, over failure to comply with the provisions of the Insolvency Act.

He was replaced by Mr Marima but KCB Group and Mr Rao challenged the decision at the Court of Appeal and the court suspended the move in September last year, pending the determination of the case.

Last month, the High Court found officials of the Ugandan-based Sarrai Group Ltd in contempt of court, for going on with operations at the troubled factory Mumias Sugar Company, despite being ordered to stop.

Justice Dorah Chepkwony found the senior officials of Sarrai Group Ltd including its owner Sarbjit Singh Rai in contempt of court and ordered them to pay Sh100,000 each, over the failure to cease operations as directed on July 28, last year.

The judge further directed the officials to appear in court on May 18, to show cause why they should not be jailed.

The halting of operations is likely to dash the hopes of farmers who celebrated the reopening of the once giant miller.

Farmers and employees staged a proteston Monday led by area MP Peter Salasya over the directive to Sarrai Group to cease operations. The MP said stopping the operations of the miller was not in the public interest.

Ms Kimeto wants the court to direct Mr Rao and Marima to file a compressive report of all activities they have undertaken as administrators since November 2021.

The lawyer also wants the duo to hand over all documents, including books of accounts, ledgers, leases, title deeds, and logbooks to the new administrator.

The new administrator should also conduct an asset count of all Mumias Sugar Company’s properties and chattels and develop an asset register to be presented in court after the appointment.

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