Kenyan multimillionaire businessman Jaswant Rai challenges Mumias Sugar’s leasing contract to younger brother’s firm

Kenyan multimillionaire businessman Jaswant Rai has challenged the awarding of a leasing contract to Uganda-based Sarrai Group after losing a leasing bid to revive the ailing sugar milling company, Mumias Sugar. Sarrai Group is run by his younger brother, Sarbi Singh Rai.

According to Business Daily, the legal action was backed by figures presented by Jaswant Rai that supported his claims of being the highest bidder in the leasing tender concluded last year.

The case under review by Justice Wilfrida Okwany claims that his company, West Kenya, placed the highest bid, but that receiver-manager allegedly awarded the deal to Sarrai Group, the lowest bidder.

As part of the legal action, Jaswant has requested that the receiver-manager explain how the Ugandan firm won the 20-year leasing contract to operate Mumias Sugar.

Through his legal counsel, he stated that the receiver-manager lacks the legal authority and professional expertise to make any findings on competition issues in Kenya, or to assess market share in any sector in Kenya.

Aside from claiming to be the highest bidder in the fight to control Mumias Sugar, Jaswant Rai claimed that his brother’s company has no track record of sugar production in Kenya.

He also stated that his own company, West Kenya, is a well-established local company with a track record of domestic sugar production, and that the leasing of the sugar company to Sarrai was motivated by factors other than the best interests of the company’s shareholders and creditors.

The legal action is expected to exacerbate the Rai brothers’ feud over control of the multimillion-dollar inheritance that their late father, Tarlochan Singh Rai, left behind after his death in 2010.

Nearly two months ago, Jasbir and Iqbal Rai, two sons of the late Kenyan industrialist, sued Jaswant Rai over the distribution of their father’s multimillion-dollar inheritance.

The brothers, who objected to the content of their father’s will, believe Tarlochan Singh Rai was coerced into drafting the document distributing his assets among his eight beneficiaries.

Jasbir and Iqbal also asked the court to grant Jaswant Rai permission to run the multimillion-dollar company, which has offices in East Africa, Malawi, India and London.