Despite ongoing litigation by Kenyan tycoon Julius Mwale, Sarrai Group resumes work at Mumias Sugar

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Sarrai Group, the Uganda-based sugar company that recently won a 20-year leasing permit to revive the distressed Mumias Sugar, has announced that it has started working at the facility despite a court order suspending the takeover. 

According to Business Daily, the company has been undertaking various activities since Dec. 24, including meetings with the management team. 

Controlled by businessman Sarbi Singh Rai, Sarrai Group recently won a multibillion-shilling tender to control Mumias Sugar, defeating other Kenyan multimillionaires such as Julius Mwale and Jules Gale, who offered higher bids. 

Mwale’s Tumaz and Tumaz offered the highest bid of Ksh27.6 billion to take over the ailing sugar miller, but did not win the bid. Instead, the receiver-manager P.V.R Rao offered the leasing rights to the Uganda-based company, which placed third in terms of the amount offered. 

The controversy surrounding the selection process resulted in a legal battle between the multimillionaires.  

Mwale filed for a stay order against the first receiver-manager, his servants, agents, principal and employees from executing any lease agreement or contract in respect to the leasing and operation of the assets of Mumias Sugar Company Limited. 

Adjudicating on the matter, a Kenyan court temporarily halted the planned leasing until the petition has been fully reviewed. 

Displeased with the ruling, Sarai Group approached the court on Jan. 3 to have the position upturned. The court, however, declined, stating that its position as of Dec. 29 will stand until the matter has been ruled on later this month. 

Despite the failed bid, local news sources confirmed that the company has proceeded with high-level meetings with relevant stakeholders and the management team in a bid to commence operations. 

Once touted as the largest sugar company in Kenya, Mumias has reportedly been in distress in the past three years following a series of financial crises and increased competition for sugarcane. 

In September 2019, the firm was placed under receivership by KCB Group to protect its assets and maintain its operations.