• Wekesa and Simiyu advocates also want the manager to demonstrate the time frame in months and years that the highly contested lease will take.
• The letter was copied to among others, High Court Deputy Registrar, Commercial and Tax Division.
Image: HILTON OTENYO
A Law Firm has written to Mumias Sugar Company Receiver Manager seeking among others a copy of the lease entered into with Sarrai Group in December last year.
In the letter to Ponangipalli Ramana Rao who is also the court's appointed Interim Administrator, Wekesa and Simiyu advocates also want the manager to demonstrate the time frame in months and years that the highly contested lease will take to “extinguish the lawful indebtedness of Mumias Sugar Company.”
The letter was copied to among others, High Court Deputy Registrar, Commercial and Tax Division.
Also sought for by the law firm is a copy of the evaluation criteria prepared at the time of making the invitations for bids to lease the assets of the company.
Additionally, the firm would like to have particulars of payments Rao has made to himself as receiver manager’s charges per annum since his appointment as the receiver up to December 31, 2021.
The lawyers have also asked Rao to furnish them with a copy of the inventory of the company’s assets that were not handed over to Sarrai Group, and part of the assets that were not subject to his evaluation of the tenders submitted.
“Please furnish copies of the consents procured by yourself and the successful bidder from the Competition Authority and the Capital Markets Authority and any other statutory bodies as condition precedents prior to entering any lease and handing over the company assets to Sarai Group,” the letter, a copy of which has been obtained by the Star reads in part.
Wekesa and Simiyu would also like Rao to confirm the number of bank accounts and balances he found in existence in the name of the company when he was appointed as receiver.
Apart from this, they want a detailed statement of account of all payments and receipts arising from the receivership of the company from the date of appointment to date.
In addition, it would like an inventory of the intellectual property owned by the company to copyright, trademarks, patents and industrial design among others.
In a separate matter before the court, five farmers, Lambert Lwanga Ogochi, Augustino Ochacha Saba, Prisca Okwanko Ochacha, Robert Mudinyu Magero and Wycliffe Barasa Ng’onga are challenging the leasing of Mumias Sugar Company to Sarrai Group and are seeking an injunction stopping the same.
Together with West Kenya Sugar Company and Mumias Outgrowers (1998) Limited, they argue that the leasing was opaque and did not follow regulatory approvals.
The defendants in the case are Rao, Kenya Commercial Bank (KCB) Limited, the Attorney General, Cabinet Secretary Ministry of Agriculture, Livestock and Fisheries, Competition Authority of Kenya, Sarrai Group Limited, Chief Land Registrar, County Government of Kakamega and Capital Markets Authority.
The farmers’ lawyer, Mr Kibe Mungai had told Presiding Judge at the Milimani Commercial Court Justice Alfred Mabeya that the lease was granted to Sarrai Group which was the lowest bidder at Sh5.8 billion leaving out West Kenya Sugar which was the highest bidder at Sh36 billion.
West Kenya Sugar Lawyer, Paul Muite pointed out that Mumias is a valuable company in terms of asset base and that West Kenya Sugar had offered Sh36 billion in addition to the monthly rent of Sh150 million, an upfront deposit of Sh900 million as security for a monthly payment and a bank guarantee security bond of Sh500 million.
In response, Sarrai Group says the lease for operating and taking over assets of Mumias Sugar Company was not marred with “improprieties, fraud and apparent corruption as averred” and the farmers have failed to place before court convincing material to demonstrate corruption in the process leading to the award of the lease to the company.
The County Government of Kakamega has raised a preliminary objection to the suit saying it is misconceived, incompetent and does not show the reasonable cause of action against the county.
Competition Authority of Kenya (CAK) says no merger approval has been submitted to them in relation to the leasing of the assets of Mumias Sugar and it is evident that Rao’s decision to hand over the assets of the company to Sarrai Group is in blatant disregard and violation of the law