- The name Ponangipalli Venkata Ramana Rao had become synonymous with ailing miller Mumias Sugar Company.
- Soon after his appointment, Mr Rao was later handed the role of the administrator by the High Court, after spelling out the plans he had for the once giant miller.
- Mr Rao is among the select 32 men who make up the exclusive club of insolvency practitioners that are licensed in the country.
The name Ponangipalli Venkata Ramana Rao had become synonymous with ailing miller Mumias Sugar Company #ticker:MSC .
He was appointed by KCB Group #ticker:KCB as the receiver-manager of Mumias Sugar in 2019 after the miller failed to pay its debt running into millions.
Soon after his appointment, Mr Rao was later handed the role of the administrator by the High Court, after spelling out the plans he had for the once giant miller.
His assessment, and which the court agreed with, was that Mumias Sugar needed an investor who would pump in capital to roar back to life. But two years later, Justice Alfred Mabeya, who appointed him the administrator, removed him from his role over his handling of the leasing process, which he awarded to Sarai Group of Uganda.
While appointing him as the administrator, the judge said Mr Rao should rescue the company and act in its best interest, of the other secured creditors, followed by the unsecured creditors and more importantly. the public interest.
Mr Rao is among the select 32 men who make up the exclusive club of insolvency practitioners that are licensed in the country.
In a ruling on Thursday, Justice Mabeya said Mr Rao was conflicted as both administrator and the receiver-manager. In the court’s assessment, Mr Rao was still beholden to KCB, which appointed him the receiver, to the detriment of other secured creditors.
“The only irresistible conclusion that can be drawn from his move was that Rao was an unwilling suitor. He was aggrieved by the appointment as the administrator yet he was already a receiver-manager,” the judge said.
Justice Mabeya was of the view that if Mr Rao found it difficult to juggle the two hats (of administrator and receiver manager), he should have moved back to court to seek direction.
He said Mr Rao was simply running away from his responsibility as an administrator and decided to run away with the receivership.
Mumias Sugar, however, is not the only troubled firm Mr Rao has been previously appointed as the receiver-manager. He has managed over 50 companies and prides himself for turning around most of them after years of distress.
The turnaround practitioner has dominated the sector for years as he is brought in to resuscitate ailing firms.
When Thika Nursing Homes and Thika School of Medical and Health Sciences was taken over by Bank of Baroda over a debt running into millions of shillings, the man appointed as the administrator was Mr Rao together with Swaroop Rao.
When Athi River Steel Plant Ltd was placed under receivership over a Sh7 billion debt in May 2018, it was Mr Rao who was also called in to manage the company and repay the debts owed to KCB and other lenders.
Mr Rao has been the much sought-after man by the banks as they push to recover their debts from defaulters including handling Multiple Hauliers, Print Point, Bag and Envelop, Dryland reeds, Midland Hauliers, TSS Grain Mills, Athi River Steel plant, and General Printers among others.
Had he succeeded in reviving Mumias Sugar Company, Mr Rao would have earned accolades because many creditors have been pondering how they can recover their billions.
On Thursday, however, the court asked him to step aside and pave way for Mr Kereto Marima, who has for the past 20 years, been in the business of corporate recovery, insolvency and receiverships.
His successor has previously managed East African Cables Limited, Kajulu Limited, KCS international, Cytton High Yields Solution, which was placed under receivership last year, and Ardan logistics.
Mr Marima is currently a partner at insolvency and restructuring company KR Consult for over six years.
He is a graduate in mechanical engineering from Jomo Kenyatta University but changed course towards business after taking CPA professional course at Strathmore University.