•Justice Mabeya cancelled the lease and removed Ponangipalli Ramana Rao as the administrator.
•Mabeya directed that the application by Sarrai and Vertox be heard together.
Image: HILTON OTENYO
Sarrai Group Limited will now keep off Mumias company until a petition challenging its operations is heard and determined.
In a ruling on Wednesday, Justice Anthony Mabeya directed that the application by Sarrai and Vertox be heard together.
Both will be disposed of by way of written submissions.
Interim orders have also been extended to June 8, 2022, but the same does not affect the duties of the administrator as Rao is still expected to hand over the administration duties to the new administrator.
The court will issue further direction on June 8.
Last month, Ugandan Sugar mill company Sarrai Group suffered a major blow after a court cancelled its Mumias Sugar lease issued last December.
Sarrai was ordered to immediately vacate the premises of Mumias Sugar.
The Ugandan company had already begun works and even pumped money into reviving the collapsed sugar mill but the court stopped the process after several bidders challenge the bid.
Justice Mabeya cancelled the lease and removed Ponangipalli Ramana Rao as the administrator.
“Accordingly, the lease made to Sarrai Group on December 22, 2021, is hereby nullified and Sarrai Group ordered to fully vacate the premises of Mumias,” the court ruled.
Judge Mabeya appointed Kereto Marima to be the new administrator of Mumias company and directed Rao to hand it over within seven days.
“Rao as receiver-manager to cooperate with Marima and ensure smooth administration of Mumias and by default, the receivership shall stand suspended during the duration of the administration,” he said.
Rao challenged the decision saying it was not right for the court to appoint him as an administrator and receiver at the same time.
The court said the only irresistible conclusion drawn is that Rao is an unwilling suitor as he was aggrieved by his appointment as an administrator yet he was already a receiver.
The judge said if Rao found it difficult to juggle the two hats, he should have come back to the court to seek directions.
Tumaz and Tumaz enterprises, the company associated with Mwale City investor Julius Mwale is said to have topped the bids with Shs27.6 billion over a 20-year lease period, according to court papers.
The second-highest bid was Kruman Finances with Sh 19.7 billion for a 25-year lease.
Transmara Group (Sarai) closed the top 3 bids with Sh 11.5 billion over a 20 year lease period and was awarded the tender irregularly.