Senate summons Mumias sugar receiver manager over revival bid

The Senate has summoned the receiver manager of the troubled Mumias Sugar Company over the progress of the proposed leasing of the mill's assets.

This is the fourth time Ponangipali Ramana Rao is being summoned. He is to appear before the Senate Standing Committee on Agriculture, Livestock and Fisheries on Monday.

“The Standing committee on Agriculture, Livestock and Fisheries summons you to appear, in person, at a meeting to be held on Monday, September 27, 2021, at 2pm,” reads the summons signed by Senate clerk J. M Nyegenye.

Nyegenye said the receiver failed to appear before the committee three times on August 6, August 20 and September 20. But Rao, who confirmed having received the summonses, said he honoured two.

"They claim I failed to honour summonses but I attended sessions twice. The third session I could not attend because the fourth gagged me from discussing the bids," he said.

He said he will attend the Monday sitting.

The committee has asked Rao to furnish the Senate with a summary of all actions undertaken in implementing its June 9 resolutions by Friday.

The committee also wants the receiver manager to provide any court documents barring him from implementing the resolutions it made on June 9 or discussing Mumias revival.

Rao was summoned to the Senate on June 9 after Kakamega Senator Cleophas Malala demanded a statement on the status of Mumias from the receiver management.

Malala argued that the process of identifying an investor to lease core and non-core assets to revive the mill was shrouded in opaqueness.

The committee resolved during the sitting that Rao restarts the process afresh in a transparent manner involving all stakeholders and in line with relevant laws.

Malala had demanded that the committee be furnished with information on who the bidders were and when the bidding happened, including details on opening and evaluation of the bids.

Malala also wanted to know the criteria used in the selection of the successful bidder and whether public participation.

Rao called for fresh bids on August 2. The fresh bids closed on August 31 but the opening of the bids has been delayed by a court case filed by shareholders seeking to be involved in the leasing process.

Rao seeks to lease the nucleus estate, sugar factory, ethanol plant, co-generation plant, mineral water plant, residential estate, guest house, clubhouse, golf course and other movable assets.

The company was placed under receivership in September 2019 by the Kenya Commercial Bank with a view to protecting its assets and reviving its operations.

The receiver opted for the leasing after his earlier attempt to revive the mill failed for lack of funds.

The once premier mill in East and Central Africa closed up shop about three years ago following huge debts owed to suppliers and creditors and shortage of raw material due to poaching of its contracted cane by rivals.

Earlier attempts by the government to rescue the mill failed even after it pumped over Sh3.5 billion into its turnaround plan.  

-Edited by SKanyara