This archive report was first published on 20 June 2021.
On June 9, 2021, the Senate's Agriculture Committee directed the Receiver Manager to re-advertise the bid to salvage Mumias Sugar Company within 14 days.
However, the Receiver Manager, Ponangipalli Venkata Ramana Rao, had already invited eight companies to bid, including Catalysis Group Russia, Sarrai Group Uganda, and Devki Group, without proper advertisement.
Activist Okiya Omtata has filed a petition seeking to temporarily suspend Ramana Rao as the Receiver Manager, citing concerns over a secretive bidding process and potential conflict of interest.
According to Omtata, the Receiver Manager had engaged in a secretive bidding process to identify a strategic investor for the Company, and none of the eight bidders had the capacity to revive the Company.
Furthermore, Omtata alleges that the Receiver Manager had a conflict of interest, as he had sold scrap metal to the purported lead bidder, Devki Steel Millers Ltd, while he was the receiver manager at Kwale Sugar Company.
The activist also claims that the Receiver Manager mismanaged the ethanol operations and shut them down in March 2021, halting all manufacturing operations at the company.
Additionally, Omtata argues that the Receiver Manager failed to publish periodic reports on his efforts to reduce the KCB Group debt and a general statement of affairs on the current state of the assets and liabilities of the company.
“It is clear that the receiver manager has failed in his mission to protect the Company’s assets and to the best extent maintain its operations. Instead, he has completely shut down the company and is en route to nailing the last nail in the coffin of Mumias Sugar Scheme,” states the activist.
