NAIROBI, Kenya, Feb 9 – The Competition Authority of Kenya (CAK), a government agency mandated to regulate mergers and acquisitions, has termed the leasing of Mumias Sugar Company as unprocedural.
The regulator rendered the opinion filed in court in a case challenging the leasing of the miller to Uganda’s Sarrai Group.
CAK said the process including transfer of assets was in violation of the law.
The lawsuit was filed by five parties: Lambert Ochochi, Augustino Saba, Prisca Ochacha, Robert Magero and Wycliffe Ng’ong’a.
The petitioners filed the suit against the statutory manager, PV Rao (KCB’s receiver manager), KCB, Attorney General Kihara Kariuki, the Agriculture Cabinet Secretary, the Competition Authority of Kenya (CAK), Sarrai Group Ltd, the Chief Land Registrar, the County Government of Kakamega, the Capital Markets Authority and Gakwamba Farmers’ Cooperative.
“It is evident that Rao’s decision to handover the assets of the company (Mumias) to Sarrai Group is blatant disregard and violation of the law, and amounts to criminal conduct under Competition Act 2010,” CAK stated in court papers in response to the case.
The farmers contested the lease award to Sarrai group, on the grounds that it was undertaken in an opaque manner and awarded to the lowest bidder without regulatory approvals.
Milimani Commercial Court Presiding Judge Justice Alfred Mabeya on Monday ordered the matter to be determined expeditiously and consequently slated the hearing from February 14th to 17th, 2022.
“The dispute should be determined expeditiously. It must be resolved once without much delay,” Justice Mabeya said.
The Judge enjoined all the parties seeking to be part of the suit and directed them to file their papers within 3 days and the applicants to file their responses within 3 days.
When the case comes up for hearing on February 14, the parties will highlight submissions.
Justice Wilfrida Okwany had on January 14th issued orders temporarily stopping the Ugandan firm from proceeding with operations at Mumias Sugar for 10 days pending the hearing and determination of the case.
On January 25, she extended the orders to March 14 to allow new parties to be enjoined in the case.
The parties included the bidders West Kenya Sugar limited represented by Senior Counsel Paul Muite, Tumaz and Tumaz Enterprises represented by Nelson Havi, and Mumias outgrowers company.
West Kenya’s counsel Paul Muite had faulted the bidding process saying it was not conducted in a fair and transparent manner.
