This archive report was first published on 4 December 2019.
On September 23, 2019, Mumias Sugar Company was placed under receivership by KCB Bank due to a Sh480.1 million loan. However, the Receiver Manager, Ponangipalli Venkata Ramana Rao, has been unable to pay the dismissed workers their Sh20,000 preferential payment because the former directors have not handed over essential documents.
According to Rao, the documents include the statement of affairs of the miller, which contains information on creditors, debtors, staff, assets, and liabilities. Without this information, Rao cannot proceed with the payments.
During a parliamentary committee hearing, Rao expressed his frustration, stating, 'Until the directors provide information on the creditors, debtors, staff, assets and liabilities of Mumias Sugar Company, the receiver cannot do much.'
Nairobi Senator Johnson Sakaja, who chairs the committee, has vowed to summon the directors and compel them to provide the necessary documents. Sakaja noted that the Company Act provides a clear mechanism for handling receivership cases.
The committee is investigating the circumstances surrounding the dismissal of over 400 employees following the placement of Mumias Sugar Company under receivership.
A meeting is scheduled between the receiver, Mumias company secretary, and Kakamega County government leadership to resolve the stalemate. If the meeting fails, Rao plans to move to court to compel the directors to provide the statement of affairs.
