Companies

Mumias sugar takeover now takes another twist

MumiasSugar2412

A tractor ploughs Mumias Sugar Company nucleus farm in Kakamega county on December 24, 2021 under Sarrai Group from Uganda. NMG PHOTO

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Summary

  • Officials of a Ugandan company, which bagged the multibillion shilling leasing tender for Mumias Sugar Company now risk the slammer after an application for contempt was filed against them.
  • Tumaz & Tumaz Enteprises moved to court on Thursday accusing Mr Sarbjit Rai, the owner of Sarrai Group, Rakesh Kumar Bvats (manager) and KCB Group appointed receiver manager Ponangipalli Rao of disobeying a court directive.
  • The lease was suspended on December 29, pending determination of a petition filed by Tumaz & Tumaz, which claims the bidding was marred with fraud, mistakes and illegalities.

Officials of a Ugandan company, which bagged the multibillion shilling leasing tender for Mumias Sugar Company now risk the slammer after an application for contempt was filed against them, for starting work despite a court order stopping the process.

Tumaz & Tumaz Enteprises moved to court on Thursday accusing Mr Sarbjit Rai, the owner of Sarrai Group, Rakesh Kumar Bvats (manager) and KCB Group appointed receiver manager Ponangipalli Rao of disobeying a court directive, which froze the 20-year deal.

The lease was suspended on December 29, pending determination of a petition filed by Tumaz & Tumaz, which claims the bidding was marred with fraud, mistakes and illegalities.

The company, through Julius Mwale, however, said Sarrai Group, which is associated with the Rai family, has been on the ground since December 24 undertaking different activities including meeting with officials from Kenya Power in a bid to have electricity restored to the plant.

Sarrai has allegedly been meeting with engineers at the firm to discuss ways of acquiring new spare parts to revive the milling plant and also began recruitment of new staff in disregard of the court order.

Sarrai Group had tried lifting the order on January 3 and filed exhibits in court showing tractors ploughing Mumias nucleus estate.

Mr Kumar had argued that the suspension of the lease was issued after the company had taken over Mumias, a fact that was not disclosed to the court.

“The respondents as well as the said officers or agents were duly served with the orders of this court on 30th and 31st December, 2021 but in blatant breach and arrogance ignored the authority and dignity of this honourable court,” lawyer Javier Munzala for Tumaz said.

He accused Sarrai Group of purporting to take over the assets of Mumias by carrying out construction works, ploughing of the farms and rehabilitating roads within the company, in contempt of the court order.

He said the Ugandan-based company had changed the security guards at Mumias and initiated recruitment in respect of vacancies at the miller.

Mr Munzala said Mr Rai, Mr Kumar and Mr Rao should be punished for contempt for disregarding the court order.

“The 2nd respondent through its director Rakesh Kumar Bavts have sworn an affidavit dated 31st December, 2021 admitting that they have continued with the interference with the company assets during the pendency of the orders issued herein and, therefore, there is every indication that the respondents are not keen to comply with this court’s reasoned decision,” he said.

Justice Jairus Ngaah certified the contempt application as urgent but directed the case to be handled by Justice Anthony Ndung’u, who had issued order suspending the lease.

Sarrai Group had protested the suspension saying the order was oppressive, yet Mr Mwale has not undertaken to pay damages in case he losses the case.