BY SAM ALFAN.
West Kenya Sugar ltd will demand explanations from KCB chief executive officer Joshua Oigara and its appointed receiver manager as to why they settled on the lowest bidder in the race to lease Mumias Sugar Company.
Through Senior Counsel Paul Muite, the miller says it placed the highest bid at Sh36 billion compared to eventual winner Sarrai Group whose bid was Sh5.8 billion, with a difference of Sh30.2 billion.
“We will seek (to have) KCB CEO Joshua Oigara to come and explain to the court, to the Kenya public the logic behind rejecting Sh36 billion and accepting 5.6 billion Kenya shillings. There has to be an explanation and they owe a duty to come and give that explanation,” said SC Muite.
The veteran lawyer added that when one is evaluating bids, the receiver manager PVR Rao owes a duty not just to Kenya Commercial Bank but to the shareholders because ultimately, it is the shareholders who put money in the company.
He said Rao owes a duty to the farmers who are also creditors, for the cane they delivered to Mumias and who have not been paid over a long period.
In its bid, West Kenya said it would have cleared all Mumias’ debts including KCB’s debt within a period of 18 months.
The firm had also promised to revive Mumias sugar and make it operational within a short period, pay farmers their dues and clear taxes owed to Kenya Revenue Authority (KRA).
Speaking to Nairobitimez, Muite said there has to be an explanation in the cause of proceedings filed to overturn the 20-year-lease awarded to Sarrai Group.
“Rao has responded and talked about West Kenya Sugar company Limited would have become dominant and I want to explain very clearly that in claiming that issue, bringing up that issue of dominance first of all he is factually incorrect because you know Kenya consumes more sugar than it produces so if you want to know who is dominant, dominance is not about milling of sugar, dominance is about the market share,” Senior Counsel Muite added.
He added that the issue of dominance is to be determined by the Competition Authority, which has the data that would show who is dominant, what percentage, what volumes any particular miller is milling or selling and Rao because he doesn’t have that competency.
“The other third point which is very critical is that if you look at the competition act specifically section 42 it is illegal, it is a criminal offence for the receiver manager to have handed over the asset of Mumias in particular the lease without prior approval of the competition authority and that’s what he did”, he added.
Lawyer Muite further added that the court cannot be called to aid in the violation of a law in the commission of a criminal offence.
“We will be arguing that the handing over of that lease is a complete nullity because of lack of authority by the competition authority. So when we talk about corruption of course inferences, the only inference that one can make is that there is something when the receiver manager rejects 36 billion and accepts 5.6 billion”, SC Muite added.
Senior Counsel was speaking after the high court allowed the parties seeking to enjoin the case seeking to overturn the decision to award Sarrai Group the controversial tender.
Justice Wilfrida Okwany gave the parties three days to file and respond to the application.