- The ruling was issued by Justice Anthony Ndung'u at the Milimani High Court in Nairobi on December 29, 2021.
- Tumaz had placed the highest bid of Sh27.6 billion against Sh11.5 billion for the Ugandan firm, for a 20 year lease.
Image: The Star
The High Court has dismissed an application by Uganda-based Sarrai Group to overturn an earlier order suspending its lease award for Mumias Sugar assets.
Sarrai Group, which is associated with the Rai family, had moved to court under a certificate of urgency on January 3 to challenge the ruling.
The ruling was issued by Justice Anthony Ndung'u at the Milimani High Court in Nairobi on December 29, 2021.
The court directed Sarrai Group to comply with the ruling.
The lease was awarded by Kenya Commercial Bank's receiver manager PVR Rao to the Ugandan firm on December 22, 2021.
Sarrai Group had asked the judge to overturn the suspension ruling, arguing that the High Court lacked jurisdiction and erred by suspending the lease award on December 29, 2021 because it had already taken over the assets of Mumias on December 22.
"I know of my own knowledge that the Applicant (Sarrai) took over the assets of Mumias Sugar Company Limited (In receivership) on 22.12.2021 therefore orders obtained on 29.12.2021 have been overtaken by events". Pleaded Rakesh Kumar Bvats a manager of Sarrai Group, in court papers.
The group said the suspension order "will cause untold suffering, embarrassment, great financial loss to the Applicant (Sarrai)".
The case will be heard on January 21, 2022.
The Public Procurement Administrative Review Board (PPARB) and the High Court suspended the leasing of Mumias Sugar to Sarrai Group which is associated with the Rai family after an application by Tumaz and Tumaz Enterprises limited (Tumaz), a firm associated with Mwale City investor Julius Mwale, successfully petitioned the court to nullify the award citing fraud, mistakes and legal irregularities in the bidding process.
Tumaz had placed the highest bid of Sh27.6 billion against Sh11.5 billion for the Ugandan firm, for a 20 year lease.
In its petition to the High Court, Tumaz argued that there was lack of transparency in the manner in which the bidding process was conducted.
Tumaz further argued that upon submitting the bid and attending tender opening, the firm never heard from the receiver manager "either within 21 days stipulated under the law or at all".
This was until when it learnt from the press on or about December 22, 2021 that the lease had been awarded to Sarrai Group under unclear circumstances.
The the High Court suspended the lease award to the Ugandan firm and allowed Tumaz to apply to have the bidding process to be done afresh.
Other bidders including France based, Kruman Finances which had the second highest bid of Sh19 billion moved to challenge the lease award to Sarrai group whose bid was Sh16 billion below the highest bid.
Kruman Finances said that financial and technical evaluation was not conducted at all by a third party as is procedurally required.
The lease award excluded the Cogen and ethanol plants which were seized by French lender Proparco and Ecobank respectively. The two held liens on the assets.
The miller was placed under receivership by KCB Group in September 2019 to protect its assets and maintain its operations.
Edited by CM