Mumias Sugar creditor opposes Sarrai comeback


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

A Mumias Sugar Company #ticker:MSC creditor has opposed an application by Sarrai Group of Uganda to halt the cancellation of the lease for the revival of the miller.

The lease was cancelled last month.

In an application filed before the High Court, lawyer Jackline Kimeto says it would be unjust and unfair to grant the order sought by Sarrai Group because the bid is a ploy to use the court process to delay and scuttle the revival of Mumias.

The lawyer who is owed Sh76 million by the collapsed miller says KCB Group #ticker:KCB and ousted administrator PVR Rao had abandoned the task of reviving Mumias until the court intervened.

“In the premises, the said application is otherwise a gross abuse of this honourable court’s process and has been brought in bad faith to scuttle the administration process and is merely intended to delay and clog the processes of this court,” she said.

Last week, the High Court suspended a decision cancelling the 20-year-lease given to Sarrai group, after the company argued that it was condemned unheard.

Justice Dorah Chepkwony froze the revocation of the lease and directed the parties to appear before Justice Alfred Mabeya on Wednesday.

But Ms Kimeto, who was among creditors who argued for the cancellation of the lease and removal of Mr Rao says Sarrai is not a party to the proceedings and the application is an attempt to hold the public interest at ransom by seeking to blackmail the court into forcibly awarding the lease

She further said the Uganda-based company has not sought the permission of the court, before filing the case as required by the Insolvency Act.

Sarrai went back to court arguing that it stands to suffer an investment loss of Sh5.6 billion.

The company’s lawyer Wesley Gichaba said Sarrai intends to file an appeal, which will be rendered useless unless the order is suspended.

While cancelling the lease, Justice Mabeya said the ailing miller would ‘permanently remain an asset under KCB and be a retirement place for Mr Rao’.

The miller was placed under receivership by KCB Group in 2019 over an unpaid loan of Sh545 million and appointed Mr Rao as the receiver-manager. He was later made the administrator and was directed to complete the leasing process.

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