KCB barred from selling Mumias after takeover

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KCB barred from selling Mumias after takeover

Mumias Sugar Company entrance. FILE PHOTO | NMG 

The High Court Thursday extended orders stopping sale of the assets belonging to the troubled Mumias Sugar Company.

The court said the status quo be maintained, meaning that the Kenya Commercial Bank and its receiver manager will not sell any assets belonging to the sugar miller or make any changes in the company.

During yesterday’s hearing, a meeting held by creditors and county government of Kakamega agreed on plans of reviving the company. The meeting, chaired by Dr John Khaminwa, resolved to appoint an administrator who would be answerable to all the parties and not just one creditor.

Mumias was placed under receivership three weeks ago after defaulting on loans amounting to Sh545 million owed to KCB.

So far, about 80 creditors have joined the case as a law firm sought to wind up the miller for failing to pay a debt of Sh76 million.

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The creditors who have since joined the case include Statec, an Austrian Packaging company, Victoria Furnitures, Westlink Electricals and Hardware and Lesphine Investments ltd, a sugar distributor, who allegedly paid Sh26 million in advance for sugar supplies but was never supplied.

Lawyer Jackline Kimeto is demanding her dues for representing the company since 2015 while 43 other creditors, sued as a group accusing the company of failing to pay them a total of Sh57.5 million.

Other creditors are Osho Chemicals, Milicons ltd and Proparco, one of the largest secured creditors and who financed the construction of a power plant at the miller.

Others are Sygenta, Galana oil, Victoria Furnitures, Copy Cat, Omaera Pharmaceuticals, Liaison Group Limited and Babs Security Ltd.

While moving to court, Kakamega County said it had set up a committee to see how they could revive the company.

Ms Kimeto filed the case arguing that she represented Mumias in various cases and provided legal opinions as agreed between them. Whereas she did his job, the management is yet to honour its part of the bargain, she said.

The company however said it has paid the debt and that they were not aware of the petition. Justice Mary Kasango adjourned the matter to November 6.

The miller’s loans stood at Sh12.5 billion at the end of June 2018. It owed Ecobank Kenya (Sh2 billion), French development finance institution Proparco (Sh1.9 billion) and Commercial Bank of Africa (Sh401 million).



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