The High Court has suspended the planned leasing of the Mumias Sugar Company to Ugandan company, the Sarrai Group.
This follows a case filed by tycoon Julius Mwale, who ąlleged that the lease process was riddled with frąud, mistakes and illegalities.
Mwale, who trades through Tumaz and Tumaz Enterprises, had placed a bid of Ksh27.6 billion, against the winning bid of Ksh11.5 billion placed by the Sarrai Group.
“On the strength of the averments made, I certify the matter as urgent and admit it to hearing during the court’s recess. Upon perusal of the chamber summons seeking leave to apply for the orders of certiorari, prohibition and mandamus, I am satisfied that the applicant has achieved the legal threshold necessary for grant of leave. I grant leave in terms of prayer 2, 3 and 4,” ruled Justice Anthony Ndung’u.
Mwale has also been directed to file the main case within three days, and the respondents to file theirs seven days afterward. The case will be heard on January 24.
Other notable figures who had placed their bids include Jaswant Rai and his siblings, who offered Ksh3.5 billion and steel tycoon Narendra Raval who placed a bid of Ksh8.4 billion.
Sarrai Group, despite being based in Uganda, is associated with Kenyan businessman Sarbi Singh Rai, a member of the famous Rai Family.
Sarrai Group runs several agro-manufacturing companies, with three sugar factories in Uganda producing about 170,000 tonnes of sugar annually. It also has operations in Malawi.
The lease excluded assets in the firm’s ethanol and power generation plants, which are currently under Ecobank and French development financier, Proparco, which are owed Ksh2 billion and Ksh1.9 billion respectively.
Companies under Sarrai Group include Uganda’s Engaano Millers, producers of wheat flour, bread and animal feeds and Ustawi Grain Millers in Mombasa.
The group also boasts of 20,000 hectares of its own nucleus estates in Uganda, with a sugar production that includes Kinyara Sugar, Hoima Sugar, and Kiryandongo Sugar.
Mumias sugar was placed under receivership by KCB Group in September 2019 to protect its assets and maintain its operations, after the miller sank into consistent losses.