Mumias Sugar has suspended Chief Executive Officer Nashon Aseka over “doubtful transactions” that appear to have been entered without following proper procedures.
Mumias, which used to be Kenya's leading producer at more than 250,000 tonnes a year, has been beset by poor management and mounting losses in recent years.
The company’s board said Aseka’s suspension would pave way for further investigation. It did not say how long the suspension, which takes immediate effect, would last.
“Some doubtful transactions appear to have been entered into without following due process and requisite approvals,” the board said in a statement, without giving details of the transaction.
The board named Patrick Chebosi, its head of agriculture, as acting chief executive officer.
Aseka said the transactions that the board was questioning were within his mandate as the company’s CEO, without giving details. He was picked for the job in June last year.
Board chairman Kenneth Ngumbao said the board will investigate whether an investment venture that he dealt with was according to stipulated company laws.
“The board resolved to suspend Aseka for 21 days while we confirm some transaction that he did without our consent,” said Ngumbao on phone.
Its share traded at seventy cents yesterday on the bourse Nairobi Securities Exchange
Mumias Sugar’s output fell to 15,891 tonnes in the year ended last June from 75,073 tonnes a year earlier, and the miller attributed this to cane shortage and a shutdown of its plant for maintenance.
It reported an annual pretax loss of Sh9.53 billion shillings versus a loss of Sh6.07 billion a year earlier.