Mumias Sugar Company’s creditor calls for appointment of new administration to oversee troubled miller

KENYA – Mumias Sugar Company’s creditor, Ms. Jackline Kimeto, has asked the High Court of Kenya to appoint a new administrator to manage the miller to secure the assets of the company and comply with the directions of this court issued on the 14th of April 2022.

Ms. Kimeto says in the application to be heard on Friday that the term of Mr. Kereto Marima, who was appointed the interim administrator by High Court judge Alfred Mabeya in April last year, has since lapsed.

“It has now become extremely necessary for the court to appoint a new administrator to secure the assets of the company and comply with the directions of this court issued on the 14th of April 2022,” she said in an application.

 With the lack of an administrator, Ms. Kimeto is apprehensive that the assets of the once giant miller will be pilfered to the detriment of all creditors, who might never recover their debts. She is seeking more than Sh76 million from the collapsed miller.

The court appointed Mr. Marima to replace Mr. PVR Rao as the administrator after the latter’s tenure was cut short over failure to comply with the provisions of the Insolvency Act.

KCB Group and Mr. Rao had challenged the decision of the new appointment at the Court of Appeal. However, the court suspended the move in September last year, pending the determination of the case.

Ms. Kimeto wants the court to direct Mr. Rao and Marima to file a compressive report of all activities they have undertaken as administrators since November 2021.

She also wants the duo to hand over all documents, including books of accounts, ledgers, leases, title deeds, and logbooks to the new administrator.

In the event of an appointment, the lawyer wants the new administrator to conduct an asset count of all Mumias Sugar Company’s properties and chattels and develop an asset register to be presented in court after the appointment.

The miller is facing a downturn in its revival that is killing the hopes of farmers who celebrated the reopening of the once giant miller.

Last month, the High Court found officials of the Ugandan-based Sarrai Group Ltd in contempt of court for going on with operations at the troubled factory Mumias Sugar Company, despite being ordered to stop.

Justice Dorah Chepkwony found the senior officials of Sarrai Group Ltd, including its owner Sarbjit Singh Rai, in contempt of court and ordered them to pay Sh100,000 each, over the failure to cease operations as directed on July 28, last year, Business Daily reports.

In 2021, the government leased the assets of Mumias Sugar Company to the Uganda-based conglomerate Sarrai Group for 20 years.

However, the government excluded assets in the firm’s ethanol and cogen plants, which were seized by Pan-African lender Ecobank and French development financier Proparco from KCB Group.

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