Vartox Resources Inc lawyer Abbas Esmail arguing application seeking to Mumias Sugar receiver manager Ramana Rao and KCB CEO Joshua Oigara to appear in court for cross-examination on Monday March 7.2022./PHOTO BY S.A.N.


Dubai based Vartox Resources Inc has claimed that KCB appointed receiver manager for Mumias Sugar PVR Rao and Sarrai Group of Uganda has had a long-standing relationship that has lasted for years.

In submissions filed in court, Vartox says the decision to award the 20-year lease to run Mumias to the Uganda-based company was not only deliberate and intentional but a calculated move by Rao and KCB to swindle other bidders and creditors.

“It is clear that there was no impartiality or transparency whatsoever in the selection process of who finally obtained the lease of Mumias”, Vartox Resources Inc says in court papers.

The company director Kristian Khachatourian says the entire evaluation process was a sham characterised by Sarrai receiving 100 percent in the technical evaluation stage.

Vartox lawyer Abbas Ishmael reiterated that Rao and KCB are the authors of Mumias’ misfortune having colluded to fleece the ailing miller and its body of creditors as a whole by acting in a manner that was neither transparent nor accountable.

“I therefore pray that Rao and KCB’s application of April 27, 2022 dismissed in its entirety,” Ishmael submitted.

The company said that there was no single mention of creditors or how they will be paid through the lease and that the miller’s doors closed because it did not have money to pay its creditors.

He added that Rao and KCB have lost sight of the insolvency law and are on a pretext to “revive” Mumias by leasing it to the lowest bidder.

Vartox dismissed allegations about former employees, suffering businesses, government losing revenue, importation of sugar, forex gap issues are lofty statements without any supporting evidence.

Lawyer Ishmael also added that Rao and KCB have not demonstrated how allowing a mysterious lease which was not availed in court will achieve any of the lofty aspirations that it is claiming ought to be achieved through shambolic process.

“It is noteworthy that one of negative order and incapable of being stayed, this” lease” document is not before court”, he adds.

The lawyer wondered what Rao was hiding from creditors and the court by failing to table the lease.

He added that the basis upon which Rao claims to have given rights to Sarrai to occupy Mumias, is not in court and the court cannot is due the order to stop Sarrai Group from vacating the premises because document that gave Sarrai a right to be in the premises has not been produced.

Kristian further added that the allegations that the government is losing revenue because no spirit or power is being produced is disingenuous and Rao decided to unilaterally leave out the ethanol plan and cogeneration plant assets in the leasing process.

Vartox adds that Rao blocked Vartox’s receiver from taking charge and securing these assets or dealing with them in any manner.

“It is extremely dishonest for Rao to claim that the government is losing revenue when he is the sole author of these losses. In fact, he expressly admits in his court pleadings and Rao’s affidavit that he stopped operating the Ethanol plant assets and he doesn’t tell the court why he did not decide to lease these assets especially after he had invited and received bids on these assets”, added Kristian.

Vartox said that the insistence by Rao and KCB that the leasing of Mumias’ assets should revert into their hands is dangerous as Rao and KCB’s motives are to ensure that Mumias’ assets are cannibalised by Sarrai a company that is known to them and with whom they have pre-existing relationships to commit fraud.

Ishmael added that returning Mumias to Rao and KCB will end up benefiting them and their ‘narrow, selfish interests’ and urged the court to reject the application by Sarrai.