- Gakwamba farmers say the ongoing process to lease Mumias sugar plant is unlawful, fraudulent, and tainted with procedural impropriety.
- They want the court to issue an order restraining Rao from granting the lease to Devki.
Image: FILE
Farmers have moved to court to challenge the unlawful process of leasing Mumias Sugar Company’s sugar plant to an investor based in Ruiru.
Gakwamba Farmers Cooperative Society has accused Ramana Rao, the receiver-manager of Mumias Sugar Company Limited appointed by Kenya Commercial Bank, of commencing a secretive and opaque process to lease the sugar plant to a strategic investor.
“Rao and KCB have not carried out an objective cost-benefit analysis to determine whether the so-called strategic investor is the most effective way of reviving MSCL and ending the suffering of its sugar farmers and other stakeholders,” they say.
Gakwamba, through lawyer Kibe Mungai, say Rao and KCB have failed to discern that existing records demonstrate that the financial challenges facing MSCL stem from a combination of corruption and poor management.
This cannot be redressed by the simplistic option of granting a lease to Devki Steel Mills Limited, which has no competence in the sugar sector, they say.
The ongoing process to lease Mumias sugar plant is unlawful, fraudulent and tainted with procedural impropriety, they added.
Gakwamba is a shareholder of MSCL. It holds 1,000 ordinary shares. Members are sugar farmers who are owed upwards of Sh25 million for cane supplied to the mill.
They want the court to issue an order restraining Rao from granting the lease to Devki to manage and operate the sugar plant.
Also sought is an order stopping Rao from leasing the sugar plant through the method of private treaty.
Gakwamba wants the court to also issue an order restraining the Kakamega government—through Governor Wycliffe Oparanya and other representatives—from interfering with the leasing and operation of the sugar plant.
The farmers have further sought an order to compel Rao to provide them with documents showing when he made the decision to lease the plant and how he proposed to do so.
They also want to know when KCB approved the decision of Rao to lease the plant when the evaluation of the submitted leasing bids was done and the criteria used to pick the successful tenderer among other documents.
“The decision of the receiver-manager to grant a long-term lease to a strategic investor to run and operate the sugar mill is based on a fundamentally flawed diagnosis of the real problems that affected the feasibility of the company between the years 2010 and 2018, leading to financial difficulties and the attendant receivership."
According to court documents, Devki announced in a public statement that it had pulled out of the leasing process following a massive public outcry citing a lack of transparency in the process.
However, since last month, the farmers indicate that Rao and Oparanya have been severally quoted in the media expressing their resolve to ensure the sugar plant is leased to Devki, notwithstanding its earlier withdrawal from the process.
-Edited by SKanyara