Setback to Sarrai Group as court halts leasing of Mumias Sugar
Tumaz & Tumaz Enterprises, the company owned by billionaire Julius Mwale, has obtained court orders stopping the leasing of Mumias Sugar company assets to Uganda-based Sarrai Group
In the court papers dated December 29, 2021, Tumaz argued that the tendering was fraudulent, full of mistakes, and breached the law.
Sarrai Group, which is a Uganda-based agribusiness conglomerate closely associated with Kenyan billionaire Sarbi Singh Rai, placed the third-highest bid of Kes11.5 billion in the lease battle.
“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 while freezing the 20-year-old lease offered to Sarrai Group.
Further, in a move that could compound the problems bedevilling Mumias, the Public Procurement Administrative Review Board has also suspended the leasing of the sugar miller’s assets until petitions challenging the award are heard and determined.
Mr Mwale, who placed the highest bid at Kes27.6 billion argued that upon bidding and attending the tender opening, his firm never heard from the receiver-manager “either within 21 days as stipulated under the law or at all”.
Read also: Uganda miller to the rescue of crisis-saddled Mumias Sugar
Mumias Sugar was in September 2019 placed under receivership by KCB Group to protect the once vibrant miller’s assets and maintain its operations.
While leasing Mumias assets to Sarrai Group, receiver-manager, and court-appointed administrator, Mr P V Rao noted that the deal was in the interest of all stakeholders and in conformity with a recent court ruling dated November 19, this year.
In Kenya, three millers – West Kenya, Sukari Industries, and Olepito Sugar that are owned by billionaire Jaswant Rai – jointly control roughly 44 percent of the sugar market.
In May, Steel tycoon Narendra Raval sought to revive Mumias Sugar through a leasing deal but dropped his Kes5 billion bid citing political interests.
The High Court is set to hear the case filed by Tumaz on January 21, next year.
