- The state-owned company has been making huge losses thereby not impacting positively on the lives of stakeholders as expected.
- In a letter dated May 15 to Linturi and Copied to Head of Public Service Felix Koskei, he said the company has incurred huge losses since Mehta took over the management.
Muhoroni MP Onyango Koyoo has demanded a forensic audit of Agro-Chemical and Food Company to determine if it is profitable or a burden to taxpayers.
He said the state-owned company has been making huge losses thereby not impacting positively in the lives of stakeholders as expected.
Koyoo said the company recorded a loss of Sh8.1 billion according to auditor general report for the year ended 30, 2020, as well as company's financial statement of board chairman Mohammed Bulle.
He said the report indicated that the company was facing financial challenges.
The Nancy Gathungu report shows that without the government support and creditors, the company ability to continue operations was doubtful.
The company was established in 1978 to produce power alcohol from the sugarcane molasses. It has been under the management of Mehta Group for the last 40 years.
Koyoo wants Agriculture Cabinet Secretary Mithika Linturi to institute a forensic audit before the management contract of Mehta International Group is readmitted.
He said the stakeholders will strongly oppose plans to renew the contract if the audit was not conducted to establish whether the company’s management has been profitable or a burden to taxpayers.
In a letter dated May 15 to Linturi and Copied to Head of Public Service Felix Koskei, he said the company has incurred huge losses.
Koyoo, who met stakeholders at his office on Monday, said forensic audits should be done when the Mehta Group CEO and some managers are out of office.
Besides the Sh 8.1 billion loss, he said the company has not paid the initial government loan given at the start of operation which has since accumulated to about Sh10 billion, according to AG's report.
Koyoo noted that forensic audits will help uncover areas of pilferage which resulted in the loss of billions.
The MP cited carbon dioxide development plant, bottling plant, water project and other operational departments which should be investigated.
He urged President William Ruto to ensure a forensic audit was carried out at the company in the interest of the public.
“We want Ruto to firmly deal with any cases of corruption in government entities to safeguard money for developments,” Koyoo said.
He cited the intense pressure from powerful politicians to renew and readmit the contract which elapsed last year. “We demand justice for all and not the group alone,” Koyoo said.
The MP said the stakeholders will hold demonstrations if their grievances are not addressed by the government. “The power belongs to the people and we will have no option but to hold protests,” Koyoo said.
He asked Ruto to swiftly act to save public funds saying some selfish and corrupt senior government officials were not telling him the truth on the lapsed contract.
Koyoo said the then Agriculture CS Peter Munya refused to renew the contract for being a rip off to taxpayers.
“We are aware there are loopholes for pilferages and theft of public funds by some department heads to make quick money and post losses to the industry,” he said.
Initially, Koyoo said Mehta group was to offer technical advisory services according to the contract but turned itself into full management roles.
The group, he said, appointed a chief executive officer who does not report to the board but directly to them.
According to Koyoo, the contract entails paying the CEO Sh2.9 million per month.
Besides the net salary, the officer was entitled to free house, servants, vehicles, local transport and subsistence, health cover, club fee, air ticket while on holiday in India and entertainment.
Koyoo further demanded that the government restructures the company and appoints substantive chief executive officers answerable to the board.
Some of the officers at the company revealed that the company was facing financial crisis. "It is true the company has been making big losses running into billions. The company also has a loan of close to Sh10 billion," one of the official said.
But the company's acting CEO Timothy Jomo Ogwang who took over from resident director and CEO Ashok Agrawal said he could not comment on the matter.
He said that was a matter for the board. Bulle said he could not comment comprehensively on the issues as there was investigations going on.
"As the board, we will deliberate and give our decision when we get the investigation report," he said.
Bulle is also the acting Managing director for Agricultural Development Corporation.