Court papers link Sarrai to KCB as jail term is sought in Mumias lease fiasco

By , K24 Digital
On Thu, 7 Jan, 2021 18:29 | 3 mins read
The Mumias Sugar Company Limited was on Tuesday, September 24, 2019, placed under receivership by KCB. [PHOTO | FILE]

A contempt of Court case has been filed against a Ugandan firm Sarrai Group ( Sarrai ) and Mumias Sugar receiver manager PVR Rao (Rao), for disobeying high court orders suspending Mumias Sugar lease award.The application is seeking Jail time for both Rao and Sarrai directors , as a new link has emerged between Sarrai and Kenya Commercial Bank (KCB).

The case was filed under certificate of urgency at Milimani high Court by Tumaz and Tumaz Enterprises (Tumaz), which placed the highest bid of Kshs 27.6 billion vs Sarrai's shs 11.5 billion for Mumias lease. The case was heard by Justice Jairus Ngaah on January 6th who directed the parties to appear for a hearing on Monday January 10th.

"The orders alleged to have been breached and which now form the foundation of contempt proceedings were made by Justice Anthony Ndungu, I direct that this matter be mentioned on January 10th , 2022 before Justice Ndungu for directions and orders he may deem appropriate ," ordered Justice Jairus Ngaah.

Tumaz argued that Sarrai Group had started work in earnest at the sugar miller despite a court order suspending the lease on December 29th, 2021, and was served to both Sarrai and Rao on December 30th and 31st according to court papers.

According to court papers, Sarrai which is associated with the Rai family has been on the ground since December 24 undertaking different activities including meeting with officials from Kenya Power in a bid to have electricity restored in the facility. Sarrai also had a meeting with the engineers at the firm to discuss the ways of acquiring new spare parts to revive the milling plant and began recruitment of new staff in disregard of the court order.

And in a new twist in the breach of the court order, Sarrai manager presented exhibits in court with its alleged machinery and tractors ploughing Mumias nucleus estate. The exhibits were presented early in the week in support of Sarrai’s case challenging the court order. Sarrai's application for lifting the suspension orders was dealt a blow when Justice Anthony Ndung'u at Milimani on Monday January 3rd, declined to lift the suspension orders.

In the documents filed by Sarrai in the earlier case, the pictures of tractors are shown in the breach of court orders, displaying number plates registered between 2012 and 2018 , that are owned by KCB , Kibos Sugar and Mumias according to NTSA motor vehicle records. It is not clear from the court papers why Kibos Sugar and KCB property were involved in the contempt exercise, and why Sarrai presented their exhibits showing their (KCB,Kibos & Sarrai) breach between December 31st to January 2nd , after court orders were served and acknowledged days earlier.

Other bidders including the France based Kruman Finances, who offered shs 19 billion bid for the 20 year lease have also protested the lease award to Sarrai.

Tumaz further wrote to the Senate on January 6th through their lawyers to seek parliament's intervention , in compelling RAO to provide information on the bidding outcome to bidders and the public. They also asked the Senate to request for information of the procedure and evaluation of the technical bids including information on who carried out the evaluation and reasons why other bids were unsuccessful.

The letter also requested the Senate to ask Rao to provide the impact of seizures of Cogen and ethanol plants by French lender Proparco and Ecobank respectively, whose assets were part of the August 4th tender notice by Rao.

Sarrai had offered shs 3 billion as part of its package for the Sugar miller excluding Cogen and Ethanol plant according to to court papers. Tumaz argued that It is not clear what the Sarrai's 20 year lease "was worth as no information has been provided to the bidders or the public by Rao".

The Public Procurement Administrative Review Board (PPARB) and the High Court last week suspended the leasing award to Sarrai until the case filed by Tumaz, a firm owned by Mwale City investor Julius Mwale, is heard, and determined.

Tumaz cited fraud, mistakes, and legal irregularities in the bidding process.

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