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September 21, 2018

Former Mumias staff to auction miller’s nine cars

Mumias Sugar factory on February 24, 2015 /REUTERS
Mumias Sugar factory on February 24, 2015 /REUTERS

A former employee of troubled Mumias Sugar Company has seized its nine vehicles to recover part of the damages awarded to her by a Kisumu court for wrongful dismissal.

Pamela Lutta was the corporate affairs manager. The Employment and Labour Relations Court awarded her Sh13.4 million.

On Wednesday, Maywood Auctioneers attached nine the vehicles to recover the initial Sh3.5 million ordered by the court as a precondition of stay orders, pending conclusion of an appeal lodged by Mumias. The auctioneer said the vehicles are worth  Sh3.1 million.

The decision will likely complicate further the ailing Mumias, which has more than Sh20 billion debt. Last month, Kenya Power temporarily disconnected electricity because of unpaid bills. 

Others owed include the Kenya Revenue Authority, cane farmers, commercial banks.

Yesterday, farmers and lobby groups appealed to debtors to negotiate with the firm on how to settle the debt, instead of auctioning its property.

“We won’t allow an individual who was sacked to come and auction our company, yet we have farmers who genuinely supplied cane to the miller and were not paid,” Usawa na Maendeleo chairman Boniface Manda said.

The company was closed. It lacked sufficient cane and blamed this on unabated poaching by rival millers.

The company was scheduled to restart milling last week, but its transporters demanded pay before they could enter into another contract.

One of the vehicles seized was assigned to the acting company CEO Patrick Chebosi. It had been grounded for fear it would be grabbed if found outside the company premises.

Chebosi yesterday said the attachment was unfortunate. He appealed to suppliers and contractors to be patient and allow them to 

resume operations.

“The company has its share of problems. If we are allowed to focus on restarting operations, I’m sure we’ll pay all the debts,” he said.

The management is worried that other debtors, including farmers, could also move to court and auction the miller, thus crippling it. The government had provided Sh3.7 billion for recovery through the National Treasury. Chebosi said it will disburse another Sh3 billion under the bailout plan.

“The money is, however, still little considering our debt

 portfolio,” he said. 

Things have taken a bad turn for the once robust miller. It faces collapse if measures are not put in place to protect it. Residents say this could strike a blow at them. Their livelihoods are also at stake.

Residents say Mumias town and the satellite trading centres had booming 24-hour economies due to continuous activities during the firm’s heyday.

A lot of money was in circulation as employees were on duty 24-7 and truck drivers, who either delivered material to the company or collected sugar, sustained the day and night business, they say. The town and environs are now a pale shadow of what they used to be.  Residents can only hope things will change.

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