BY SAM ALFAN.
The High Court has directed Sarrai Group and its affiliated companies to cease operations at Mumias Sugar Company.
Justice Wilfrida Okwany said the Uganda-based company should stop all activities at Mumias after the firm was accused of using the advantage of a court order to dismantle assets of the ailing miller.
She said all movable assets, machinery or equipment, which might have been removed from premises of Mumias Company, be returned with immediate effect.
The judge directed the OCS Mumias Police station to facilitate the return of all vandalized and looted assets of Mumias Sugar Company.
Justice Okwany made the ruling after four creditors Kimeto & Associates, Vartox Resources Inc, Khaminwa & Khaminwa Advocates and Wekesa & Simiyu Advocates moved to court seeking to stop the operation of Mumias Sugar company assets pending hearing and determination.
The application was supported by West Kenya and Vartox Inc, who accused Sarrai of stripping Mumias of its assets.
They also pleaded with the court for Kereto Marima, who was appointed by Justice Alfred Mabeya in April to take charge of and secure the assets of Mumias company assets and present a comprehensive report of the status of the assets to the court pending hearing and determination of a case lodged by the creditors.
In the main petition, the creditors wants the court to order Sarrai Group to produce a complete inventory of all the assets of Mumias Sugar ltd that were handed over to it by Ponangipalli Venkata Rao and to produce a full account and inventory of all the assets that have been removed from the premises of Mumias Sugar company.
“Am very apprehensive that unless the illegal removal of assets is stopped by a preservation order issued by this court, Sarrai Group ltd will strip dismantle and carry away other creditors have to recover our debts,” creditors told the court.
Kimeto told the court that Sarrai Group has been dismantling, vandalising and removing very expensive Mumias’ turbines and machinery from the premises.
She said it is not known whether they are being sold off in consultation with Kenya Commercial Bank (KCB) and Rao who illegally gave them possession of the premises.
She adds that she has established that Rai is fully owned and controlled by the same people that own and control Sarrai Group, Sarbjit Singh Rai and Rajbir Signh Rai.
“All Mumias assets are currently at Sarrai Group mercy because there is currently no oversight over Mumias’ assets as the new administrator appointed by this court is palpably unable to secure the assets of Mumias as a result of Sarrai’s continued presence in Mumias premises, ” Kimeto told the court.
Kimeto added that she has observed that Sarrai has been emboldened by utterances made by politicians in public meetings that no one can stop Sarrai Group from operationalising Mumias’ sugar factory. Not even the court of appeal.
Rival West Kenya Sugar Company through veteran lawyer Paul Muite and Edward Gitonga told the court that the occupation and control of the vast assets of Mumias by Sarrai has exposed those assets to vandalism, and theft.
“We humbly submit that a situation where Sarrai on the basis of an irregularly issued lease attacks, takes and vandalizes assets of Mumias without due sanction of the body of creditors would defeat the overall objective of the administration and that the evidence of vandalism and theft as disclosed by the photographs adduced by the Applicant herein are relevant to the just determination of the issue herein and thus admissible.
Lawyer Gitonga added that the Court as the Insolvency Court in the matter of administration of Mumias has a duty to ensure that the assets of the company are safeguarded for the benefit of the body of creditors as a whole and the company, even as the appeals against the decision of April 14, 2022 are pending determination.
Lawyer Gitonga further submitted that failure to do this will inevitably lead to irreparable harm as the said assets would be vandalized, stolen, and wasted
