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Sugar Tycoon Could Be Jailed For Contempt Of Court

Sarrai Group managers running Mumias Sugar to be sentenced on 15th June

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The High Court in Nairobi has pushed sentencing of Sarbjit Singh Rai, Rakesh Kumar and Stephen Kihumba of Sarrai Group to 15th June in a contempt of court case. This is after Justice Dorah Chepkwony recused herself from the Mumias Sugar lease case since she has been transferred.

The three officials were directed to appear before Justice Alfred Mabeya – the presiding judge of the Commercial division – and show cause why they should not be jailed for contempt of court for continued operations at Mumias Sugar Company (MSC) despite being ordered to stop.

Justice Chepkwony found them guilty of contempt of court last month and fined them Ksh100,000 before directing them to appear before judge Mabeya for sentencing because she was on transfer. Justice Mabeya, on his part, pushed the sentencing of Rai, Rakesh Kumar and Kihumba to 15th June before Justice Josephine Mongare.

Sarbjit Singh Rai is the owner of Uganda-based Sarrai Group that controversially won 20-year lease to operate Mumias Sugar Company. Judge Chepkwony ruled last month that Sarrai Group had proceeded with the operations at the miller despite being ordered to cease operations on 28th July, 2022.

The Uganda-based company had been awarded a 20-year-lease to operate the troubled miller but it was later cancelled. KCB Group, which had placed the miller under administration, challenged the decision and was granted temporary orders in September last year to continue operating, a stand supported by Sarrai Group.

See >> Why Mumias Farmers Are Opposed To Sarrai Group Running Factory

In his ruling on 14th April, 2022, Justice Mabeya said if the lowest lease amount of Ksh5.8 billion by Sarrai Group was accepted, the sugar miller would never bounce back to profit. He said the amount was not even sufficient to settle the debt owed, pay cane farmers and resume the company’s operations.

“The receiver manager-cum-administrator was seriously conflicted in awarding the lease to Sarrai Group,” Justice Mabeya said in his ruling. “The lease should have been awarded to a company with financial muscle to bring the company back to life. I do not understand why he disregarded the highest bidders.”

Tumaz and Tumaz emerged as the top bidder with Ksh27.6 billion for a 20-year lease in the Mumias Sugar bidding process that attracted eight bidders.

Next Read >> Kenyan Banker Who Made Sh400M From a Singe Deal

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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