- Move seen as part of agreed restructuring plan by receiver and county government of Kakamega
- Company initially employed 9, 000, who dropped to 4, 000 and then about 900 today
Image: HILTON OTENYO
All employees of troubled Mumias Sugar Company have been dismissed as the effects of receivership begin to sink.
In a notice signed by receiver manager PVR Rao, the contracts of all employees were terminated effective September 20 when the miller was placed under receivership by the Kenya Commercial Bank.
“Any payment to the affected employees shall be dealt with in accordance with provisions of the law. Accordingly, the receiver shall engage the services of any employee on a temporary basis until the time when the company’s operations are revived,” the notice read.
Rao said priority will be given to past employees while recruiting staff on temporary terms.
The notice is copied to all heads of departments and Kenya Union of Sugar Plantation and Allied Workers.
The company has been supporting over 600, 000 households and initially employed 9, 000 people which dropped to 4, 000 when trouble begun and today stands at 900.
The move to send all employees home comes five days after the receiver manager, KCB, Kakamega governor Wycliffe Oparanya and representatives of other lenders formed a five man steering committee to oversee revival of the miller.
It is seen as part of the agreed restructuring plan by the receiver and the county government of Kakamega.
The meeting in Nairobi resolved that all stakeholders support a hybrid receivership.
Members of the committee are Ashitiva Mandale, George Kashindi, Lynette Okiro, Jackline Kimeto and a representative of the National Treasury.
Benson Mabinda, Wilfred Buyema and Benson Ndombi Okumu were tasked with developing an implementation plan.
The meeting also agreed that there shall be no sale or mortgage of the company’s immovable assets in the interim.
KUSPAW secretary general Francis Wangara confirmed the receiver manager had engaged the union before.
“They had briefed us that they would terminate all employment contracts and engage workers afresh. Were also agreed that the workers won’t leave their houses as they wait to know who will be engaged afresh,” Wangara told the Star on the phone.
The company has remained shut since April last year over lack of raw material and heavy debts, with some of the lenders threatening auction company assets.
On September 20, KCB appointed Rao as the receiving manager to run the firm and redeem its debentures.
The company also owes Kenya Power, Kenya Revenue Authority among other creditors billions of shillings.