The wrangles surrounding Mumias Sugar Company don’t seem to be reducing after the board and management of the Company faulted Kakamega Governor Wycliffe Oparanya’s interference into the Company issues. The management has termed his efforts to meddle in the Company’s affair in a bid to revive it as “unwarranted” and “unlawful.” The Governor has already set up a 12-man committee to look into the revival of the Sugar Company, giving it different tasks among theme ensuring that the Company’s assets are safe.
However, the Company’s management has reiterated that the board has put in place a competent management team driven by the CEO to oversee and implement the Company’s strategic plan, “The lawful responsibility for the management of the financial and non-financial resources of the Company is vested in the Board and Management. Shareholders legally own this company and the fiduciary duty for its management rests with the Board who are not only answerable to them, but also to the Lenders who are key stakeholders in the Company as they hold securities over various Company assets. Any interference with the management of the Company is a breach of the law,” read a press statement from the Company.
The management was keen to point out that any engagements with farmers and the local community will be done within the law, adding that any attempts to subvert the law are rejected and they are waiting for the report from the Sugar taskforce. There were suggestions that the management was set to sell off the Company’s assets but the Board of Directors Chairman Dr. Kennedy Ngumbau dismissed the claims earlier, saying the assets are controlled by the lenders.
The Company became technically insolvent after incurring further losses that led to total liabilities trumping total assets. In financial results released in March, the losses in the year ending June 2018 rose to Kshs 15.1 billion for a previous Kshs 6.8 billion, while the total assets as of June 2018 stood at Kshs 15.7 billion against a total liability of Kshs 21.6 billion. The losses have been blamed on a shortage of cane and impairment charges to the plant and machinery to Kshs 4.9 billion form Kshs 2.6 billion. Cane delivered to the miller dropped from 417,347 tonnes to 283,435 tonnes, a 32 percent drop.
A petition for the winding up of the Company had been presented to the High Court and a Court sitting was on 30th May at the Milimani Law Courts, High Court Commercial and Tax. Other interested parties were present to support the petition, with Justice Mary Kasango setting the hearing of next proceedings on 23 July.
