This archive report was first published on 20 June 2021.
Businessman Ponangipalli Venkata Ramana Rao, the Receiver Manager of Mumias Sugar Company Limited, is facing a challenge from activist Okiya Omtata. Omtata has filed a petition seeking to temporarily suspend Rao's leadership of the company, citing concerns over a secretive bidding process and potential conflict of interest.
According to Omtata, the Senate's Agriculture Committee directed Rao to re-advertise the bid to salvage the troubled Mumias Sugar Company within 14 days, following a secretive bidding process. However, Rao had already invited eight companies to bid, including Catalysis Group Russia, Sarrai Group Uganda, and Devki Group, without proper planning or consideration for the company's needs.
Omtata argues that none of the bidders had the capacity to revive the company, leading to fears that a plan was underway to dispose of the company to Rao's cronies for a song. Rao's actions, Omtata claims, have further reinforced fears of a conflict of interest, particularly given his previous role as Receiver Manager at Kwale Sugar Company, where he sold scrap metal to Devki Steel Millers Ltd, the purported lead bidder.
Furthermore, Omtata alleges that Rao mismanaged the ethanol operations at Mumias Sugar Company, shutting them down in March 2021, and failed to plant sugarcane on 307 HA of the Nucleus Estate, resulting in a significant waste of resources.
As of June 2021, Rao had not published a general statement of affairs on the assets and liabilities of the company, nor had he made known the efforts he had taken to protect the assets of the company and the interests of investors, creditors, and other parties.
