Kakamega claims West Kenya losses in Mumias Sugar lease fight

West Kenya Sugar Company chairman Jaswant Rai (right) and CEO Tejveer Rai.

West Kenya Sugar Company chairman Jaswant Rai (right) and CEO Tejveer Rai. FILE PHOTO | NMG

A confession by West Kenya in 2020 that it was making losses and was at risk of collapse has come to haunt it in its fight to lease Mumias Sugar Company.

This is after the Kakamega County opposed West Kenya’s bid to lease Mumias Sugar Company arguing that the firm associated with the Rai family had previously admitted that it was struggling financially.

In an application before the High Court, Kakamega County alleges that West Kenya had stated in a suit filed before the Employment and Labour court that it had suffered massive losses and was at risk of collapse, because of the effects of the Covid-19 pandemic.

The county attorney Vivianne Mmbaka says the revelations were made in a suit filed by West Kenya as it sought to stop former employees from enforcing an award of Sh934.4 million, arising from salary arrears.

“It is strange and impractical for the 6th plaintiff (West Kenya) who is unable to settle a claim of Ksh507,488,511 to allege that, at the time of submitting the bids to the company which is just one year after the admission of its precarious financial situation, it was capable of injecting Ksh36 billion into revival of the Company (Mumias),” she said in an affidavit.

West Kenya joined a case filed by five farmers opposing a 20-year lease awarded to Uganda-based Sarrai Group. The court granted temporary orders, stopping Sarrai Group from taking over the Mumias, pending the determination of the case.

Mr Jaswant Rai of West Kenya supported the farmers saying his company placed the highest bid for the lease of Mumias but was shocked when the administrator PVR Rao announced Sarrai Group, which was the lowest bidder as the winner.

He said Mr Rao presented a biased and lopsided assessment of the bids and his justification of dominance as the reason for settling on the rival company, was absurd.

Mr Rai said he was ready to pay a six-month rent deposit of Sh900 million as security for rental and other obligations, but Mr Rao overlooked it.

On Wednesday, Mumias Outgrowers Company (Moco) asked Justice Alfred Mabeya to send the cases to Chief Justice Martha Koome, for the appointment of a bench of three judges to hear the case.

Through lawyer Maureen Odeck, Moco said the case raises substantial questions of law and of great public concerns to warrant the empanelment of a bench of more than three judges, to determine the case.

She said it was prudent to shield the court from undue pressure by having the matter heard by a bench of three judges. Further, the lawyer said there are several cases being handled by different judges, who might arrive at different verdicts and embarrass the court.

The application was opposed by among others KCB and Mr Rao who said it was a ploy to delay the matter, yet the case was filed under a certificate of urgency.

Senior Counsel Kiragu Kimani told the court that the case was a commercial dispute and had nothing to do with the interpretation of the constitution.

“I verily believe that if the plaintiffs intended to raise any questions of violation of rights or constitutional interpretation, they would have filed a constitutional petition in the Constitutional and Human Rights Division of this court,” Mr Rao said in an affidavit.

Justice Mabeya will rule on the application on Wednesday.

[email protected]