A High Court has extended orders barring Sarrai Group Limited from carrying out any activities in 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.
Last month, Ugandan Sugar mill company Sarrai Group suffered a major blow after a court cancelled its Mumias Sugar lease issued last December.
Sarrai was ordered to immediately vacate the premises of Mumias Sugar.
The Ugandan company 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 bid.
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 of Mumias company 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 come back to the court to seek 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 Kshs27.6 billion over a 20-year lease period.
The second highest bid was Kruman Finances with Kshs. 19.7 billion for a 25-year lease.
Transmara Group (Sarai) closed the top 3 bids with Kshs. 11.5 billion over a 20 year lease period and was awarded the tender irregularly.
