State suffers blow in bid to recover Miwani Sugar land

Plans to recover hundreds of acres of land formerly owned by Miwani Sugar Company have been dealt a blow after a judge ruled that there was no proof of fraud when the property was auctioned 13 years ago.

Justice Anthony Ombwayo equally dealt a blow to Kisumu County government, which sought to acquire part of the land for special economic zones.

He ruled that other than the allegation against some of the directors of the company, which was placed under receivership, there was no specific evidence of any fraud played by the purchaser of the property, Crossley Holdings Ltd.

“I have gone through all the decisions of the court on this point. Since I have already found that fraud or misrepresentation has not been proved, the title of the petition is protected by Section 26 (1)(a) and (b) of the Land Registration Act,” the judge said while upholding the title acquired by Crossley Holdings.

Crossley Holdings purchased the expansive land in December 2007 for Sh752 million through a public auction.

The land was initially owned by Miwani Sugar Mills Limited, a private company and whose assets and liabilities were purportedly taken over in 1989 by Miwani Sugar Company (1989) Ltd (in receivership).

In July 10 last year, the Ministry of Agriculture and Food Authority placed an advertisement in the local dailies titled, 'International Expression of Interest (IEOI) for leasing and operating each of the five (5) state-owned sugar factories in Kenya'.

In the IEOI, the Ministry listed Miwani Sugar Company as one of the State-owned factories offered, and sought bids to redevelop them into large complexes and also manage them for a leasehold period of 25 years.

Crossley challenged the move saying the decision was illegal because the land was privately owned. The court ruled that the previous owner was Miwani Sugar Mills Limited, which was a private entity.

The judge said there was no document produced to show that the property was ever owned by a state department or organ and an entry showing registration of certificate of incorporation, did not amount to transfer to Miwani Sugar (in receivership).

Agriculture CS Peter Munya had told the court that an agreement was reached and Kenya Sugar Board took over Miwani Sugar Company’s debts upon which the State acquired all securities including the title to the property. He sought for the cancellation of the title held by Crossley Holdings.