BID

Tumaz Enterprises to make another attempt on Mumias Sugar

This is after the Court canceled a lease that had been awarded.

In Summary

•The High Court last week quashed the procurement proceedings that awarded Uganda's Sarrai Group a 20-year lease to operate the miller.

•Justice Mabeya appointed Kereto Marima to be the new administrator of Mumias company and directed Rao to hand over within seven days.

Mumias Sugar Company entrance
FILE Mumias Sugar Company entrance
Image: HILTON OTENYO

Tumaz and Tumaz Enterprises– a company associated with Mwale City investor Julius Mwale will make a new bid in the Mumias Sugar takeover, it now says.

This is after the High Court last week quashed the procurement proceedings that awarded Uganda's Sarrai Group a 20-year lease to operate the miller.

“The court made a well-argued and reasoned judgment,” said the tycoon, while reacting to the verdict adding that his company will bid again in the fresh bidding process once the exercise is open for public bidding.

Mwale’s firm tapped consultancy firm, J P Mukherji & Associates (JPMA) last November, in what insiders believed was likely to favour the bid since JPMA runs Nigeria’s Dangote Sugar refinery Plc.

Tumaz and Tumaz emerged as the top bidder with Sh27.6 billion for a 20-year lease in the Mumias Sugar bidding process which had attracted a total of eight bidders.

Last week, the High Court canceled a lease awarded to the Uganda-based miller to manage the troubled Mumias Sugar Company on grounds that it would benefit KCB Group at the expense of the long-suffering Mumias shareholders and other lenders owed by the miller.

Justice Alfred Mabeya on April, 14 froze the Sarrai Group deal – and kicked out Ponangipalli Ramana Rao as the administrator for Mumias Sugar Company.

In his place, Justice Mabeya appointed Kereto Marima as the new administrator for the miller, ordering Rao to hand over the company to the latter.

“The manner in which Rao handled the leasing process did not tally with what was expected of him as an administrator,” noted the judge in his ruling, arguing that the lease was not in line with the best interest of the company.

He continued, “The same (lease) was withheld from the court without any explanation. What did it contain that Rao did not want the court to see?”

“This court has considered the allegations made against the leasing process. Rao awarded the lease to the lowest bidder while there were higher bidders, without giving any justifiable explanation,” he queried.

Justice Mabeya’s verdict came as a reprieve for some local sugar millers and bidders who had protested at being denied the lease despite placing higher bids than the Ugandan miller.

The ruling now offers them a second attempt to take over the firm’s management.

The judge, in his ruling, gave the new administrator 60 days to report the list of both secured and unsecured creditors and their amounts to court and start the new leasing process.

In January this year, the County Government of Kakamega moved to the county’s High Court to stop Tumaz and Tumaz Enterprises, a firm associated with Mwale City investor Julius Mwale from interfering with Sarrai’s Mumias lease.

Tumaz and Tumaz, and West Kenya were enjoined as plaintiffs in the farmers’ case against the awarding of the lease to Sarrai Group.

Other defendants in the case included PVR Rao who was the Mumias Sugar Company administrator, the County Government of Kakamega, the Attorney General, and the Competition Authority of Kenya.

Raval, through his Devki Group, offered Sh8.4 billion while Rai under his West Kenya Sugar offered Sh3.5 billion.

Other bidders who had submitted their bids include Kruman Finances associated with French and Turkish investors, with a Sh19.6 billion bid for a 25-year lease, and Transmara Group (Sarai) with Sh11.5 billion bid for a 20-year lease period.

Pandhal Industries bid in a Sh9.7 billion proposal over a 20 years lease while Kibos Sugar bid came in at Sh8.8 billion.

A Mauritius-based company, Sucrie Des Mascareignes Ltd also participated in the October 2021 public bidding exercise, but failed to disclose the value of its bid.

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