Kenyan tycoon Julius Mwale threatens court action after losing hold over Mumias Sugar

Kenyan tycoons Julius Mwale and Jules Gale, who recently lost their bid to revive the collapsed sugar milling company, Mumias Sugar, have threatened to challenge the awarding of the tender to another bidder — Uganda-based Sarrai Group.

The multimillionaires argued that Sarrai Group was the least qualified to be awarded because it did not offer the highest bid.

They also criticized how the bidders’ technical capacities were evaluated and called for a third-party review of the process.

Commenting on the issue, Mwale, whose firm Tumaz & Tumaz placed the highest bid of Sh27.6 billion during the tender but eventually lost out, accused the receiver-manager of not being sufficiently transparent in the evaluation process.

He noted that his firm was better-placed to win the bid if the evaluation process was fair and transparent, citing the amount offered and the firm’s track record in handling such projects.

Speaking further in an interview, Mwale said: “We are moving to court immediately to challenge this process because the receiver-manager was not transparent in his evaluation of the bids. I am confident that the court will stop this process given that there is enough evidence to show that the process was flawed.”

Meanwhile, Gale agrees with the multimillionaire’s assertion. The managing director of the France-based Kruman Finances stated: “The bid evaluation report on technical capacity should be evaluated by a third party other than the receiver-manager and clear ranking provided, based on actual evaluation facts as per the technical proposal.”

Kruman Finances placed the second-highest bid amounting to Sh19.7 billion, which was similarly rejected. The company sought a 25-year lease and had proposed a 15-percent free shareholding to the central and county government.

In addition, it offered to inject $100 million within 12 months to revamp the company and an additional $150 million to support farming operations, capacity building and an alternative crop strategic development plan.

KCB Group had placed Mumias Sugar under receivership in 2019 and appointed Ponangipalli Venkata Ramana as the receiver-manager. The company’s shares were then suspended on the Nairobi bourse.

In October 2021, the receiver-manager held a much-awaited public tender for the distressed sugar company, attracting a total of eight bids.

The tender process, which lasted for more than four months, saw the emergence of Sarai Group as the ultimate winner. Sarai Group is controlled by Kenyan tycoon Sarbi Singh Rai.

Sarai Group operates three sugar factories in Uganda and ranked third in the bidding process by bid amount, offering Sh11.5 billion over a 20-year lease period.