BY SAM ALFAN.
A farmers co-operative society wants two secured creditors of Mumias Sugar company ltd summoned to court and explain how it assigned their debt to a local lender.
Gakwamba Farmers society says in the application the chief executive officers of Propaco Bank, Eco-Bank as well as Victoria Commercial Bank should appear in court explain how the debts were transfered.
The farmers society through lawyer Danstan Omari said the court should be told how debts later ended up being assigned to Vartox Resources Inc.
Proparco, a French company and Eco Bank financed the ethanol and power plants at Mumias Sugar company.
The society argue that after thoroughly perusing documents filed by Vartox Resources Inc they have noticed some glaring inconsistences or lapses as to the manner in which Eco-Bank and Propaco transfered their liability to Victoria Commercial Bank and ultimately Vartox Resources Inc.
Omari argued that the notice to the borrower by Propaco dated October 4,2021 is not simultaneously executed by Propaco and Victoria Commercial Bank in all the places parties were supposed to execute in the said transfer or notice.
“The manner in which Propaco and Eco-Bank transfered liability to Victoria Commercial Bank and later to Vartox Resources Inc without disclosure of the consideration given whatsoever leave much to be desired,” Omari submitted.
In another application, Vartox Resources Inc wants KCB appointed receiver manager Ramana Rao summoned over a report concerning the accounts of Mumias Sugar Company, which he filed in court in January.
Vartox Resources Inc, one of the creditors of the ailing miller says Rao should appear in court and explain the books of accounts of the miller for the last two years.
In an application supported by rival West Kenya Sugar Company, Vartox also wants KCB group chief executive officer Joshua Waigara to appear in court for cross-examination.
Through lawyer Ismael Abbas, Vartox also claimed that Rao has failed to produce a detailed valuation report as ordered by the court.
Abbas submitted that it has become necessary for Rao to be cross-examined on the inconsistencies, falsehood and coverup that he has engaged in during his time as receiver manager of Mumias Sugar.
He said Rao’s recent actions to lease the assets of Mumias Sugar to Sarrai Group Limited is littered with inconstancies.
“As the applicant’s application dated January 28, 2022 is under insolvency Act 2015, there is no provision for a viva voce hearing unlike in civil cases and the applicant does not have any way to question Rao on the many inconsistencies to bring him to account for his law as administrator and receiver of Mumias,” said Abbas.
He further submitted that Rao has conducted himself in a manner meant to disenfranchise other creditors and stakeholders of Mumias Sugar, who have a debt portfolio exceeding Sh30 billion.
