Mumias Sugar will initiate an audit into how the management under former CEO Errol Johnson spent the Sh3.2 billion bail out cash from the national government.
Chairman Kennedy Ngumbau on Friday said the audit will focus on why the company did not go full throttle in its operations despite the huge amount of cash it was allocated.
Since 2015, the National Treasury allocated Sh3.7 billion for implementation of the firm's turnaround strategy in the wake of losses amounting to billions of shillings.
The company was given the last batch last August after a six-month closure. It managed to restart operations in October.
"We have invited investigators to look into the Sh3.2 billion that was given to the previous management under Errol," Ngumbau told journalists at Mumias' Booker Academy.
The former CEO's office, finance, audit, and procurement departments will be under investigation.
"There will never be wastage in this company again. What we want is the support of our shareholders and farmers," the board chair said.
"We can't borrow money and misuse them in a way that it scares off other people willing to help the company," he told shareholders at the company's 46th AGM.
It was the first time the annual general meeting was hosted in Mumias, a shift from past tradition where the meetings took place in Kisumu.
CEO Nashon Aseka said the move to bring the meeting close to farmers was to enable small shareholders to raise their grievances too.
Aseka, who took over Errol Johnson in June, was praised by most speakers for his efforts that saw the miller resume operations in October.
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Mumias Sugar Company reported a net loss Sh6.8 billion after tax in the financial year ending June 30, 2017.
The company has attributed the loss to the perennial lack of sugarcane, the raw material used to produce crystal sugar - which is the company's core product.
Boniface Manda, a shareholder, said the company will be free if it acknowledges that previous managers were reluctant to deal with cartels and rogue contractors.
The AGM was attended by MPs Emmanuel Wangue (Navakholo), Benjamin Washiali (Mumias East), and Bernard Shinali (Ikolomani).
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