A lawyer representing a creditor of the insolvent Mumias Sugar Company has alleged that she was threatened by state officers to withdraw her petitions challenging the leasing of the company to Sarrai Group, a subsidiary of billionaire Jaswant Rai Group of Companies.
Jackline Kimeto of Kimeto & Associates Advocates, who is owed close to Ksh.77 million by the sugar miller, wrote a letter to the Deputy Registrar of the High Court Commercial and Tax Division on September 2, 2023, seeking to cancel the notices of withdrawal that she had filed on September 1, 2023.
According to the letter, which was seen by this reporter, Kimeto claimed that she was subjected to “extreme duress and threats to her life, citizenship and personal liberty” by state officers acting with a view to assisting the first and second respondents and their proxies in this suit.
She also stated that she was currently being subjected to “force, threats of imprisonment, coercion, threats to her life, and extreme psychological pressure” to withdraw her petitions filed on March 20 and 22, 2019 without any mention as to how her money decrees shall be settled in full.
Kimeto had filed two petitions under IP E004 and IP E007 of 2019, seeking to remove the first and second respondents, Ponangipali Venkata Ramana Rao and Kereto Marima respectively, as administrators of Mumias Sugar Company.
She has also sought to stop the leasing of the company’s assets to Sarrai Group, which she accuses of colluding with the administrators to defraud the creditors.
Kimeto further alleges that the Senate Committee on Agriculture, Livestock and Fisheries interfered with the court process by summoning and directing the administrators on how to handle the receivership.
She argues that this was against the doctrine of separation of powers and the Constitution.
Kimeto has requested the court to grant her a mention date before the judge as soon as possible, citing the urgency of the matter.
She has also expressed concern over the ongoing court recess, which she said could delay the resolution of the case.
The letter seen by cnyakundi.com has exposed the intrigues and controversies surrounding the fate of Mumias Sugar Company, which was once a giant in the industry but collapsed due to mismanagement, corruption and debts.
The company owes various creditors over Ksh.12 billion, including banks, farmers, suppliers and employees.
The Rai Group of Companies is one of the largest conglomerates in East Africa, with interests in sugar, cement, timber, edible oils and real estate.
It is accused of using its influence and connections to take over struggling companies at low prices.
This reporter has learnt that Kimeto is not the only creditor who has faced intimidation and harassment from Rai and his associates.
Several other creditors have also reported receiving threats and offers of bribes to withdraw their claims or accept unfair settlements.
The leasing deal between Sarrai Group and Mumias Sugar Company has been shrouded in secrecy and controversy since it was announced in June 2020.
The deal was opposed by various stakeholders, including farmers’ unions, local leaders, civil society groups and members of parliament.
It was also challenged in court by several parties, including Kimeto, who argued that it violated the Insolvency Act and the Companies Act.
They claimed that the deal was done without proper consultation and valuation of the company’s assets and liabilities.
The deal was also questioned by the Ethics and Anti-Corruption Commission (EACC), which launched investigations into allegations of corruption and conflict of interest involving some of the administrators and Rai’s agents.
EACC has since summoned several individuals for questioning, including Rao, Marima and Rai’s son Tejveer Rai.
Detectives also raided several offices and premises linked to Rai Group of Companies and Mumias Sugar Company in search of documents and evidence related to the deal.
The agency is expected to submit its report to the Director of Public Prosecutions (DPP) soon for possible prosecution of those found culpable.
Kimeto’s letter adds more pressure on the court and the EACC to expedite their processes and ensure justice for Mumias Sugar Company’s creditors and stakeholders.
The fate of MSC hangs in the balance as the court awaits Ms Kimeto’s appearance and evidence to support her allegations.
The court will also have to determine whether Sarrai Group has a valid claim to run MSC or whether it should be kicked out for violating the law and court orders.
