NAIROBI, Kenya, Jun 10 — A High Court has extended orders barring Sarrai Group Limited from administering Mumias Sugar Company until a petition challenging its operations is heard and determined.
“Pending the delivery of the ruling on 23rd September 2022, there shall be an interim order of stay of execution of the ruling and order of the High Court,” Justice Alfred Mabeya ruled on Wednesday, June 8.
The Ugandan sugar processor suffered a major blow in May after the court invalidated its lease granted in December 2021.
Sarrai was ordered to immediately vacate the premises of Mumias Sugar.
The firm had already began works and even pumped money into reviving the collapsed sugar mill but the court stopped the process after several bidders challenge the lease award.
Justice Mabeya cancelled the lease and removed Ponangipalli Ramana Rao as the administrator.
“Accordingly, the lease made to Sarrai Group on December 22, 2021 is hereby nullified and Sarrai Group ordered to fully vacate the premises of Mumias,” the court ruled.
Judge Mabeya appointed Kereto Marima to be the new administrator and directed Rao to hand over within seven days.
“Rao as receiver manager to cooperate with Marima and ensure smooth administration of Mumias and by default the receivership shall stand suspended during the duration of the administration,” he said.
Rao challenged the decision saying it was not right for the court to appoint him as an administrator and receiver at the same time.
The court said the only irresistible conclusion drawn is that Rao is an unwilling suitor as he was aggrieved by his appointment as an administrator yet he was already a receiver.
The judge said if Rao found it difficult to juggle the two hats, he should have gone back to the court to seek further directions.
“Rao was simply running away from his responsibility as an administrator and decided to focus on receivership,” he said.
Tumaz and Tumaz enterprises, the company associated with Mwale City investor Julius Mwale topped the bids with Sh27.6 billion over a 20-year lease period.
The second highest bid was Kruman Finances with Sh19.7 billion for a 25-year lease.
Transmara Group (Sarrai) closed the top three bids with Sh11.5 billion over a 20-year lease period and was awarded prompting other bidders to challenge the process terming it irregular.
