A Kenyan high court residing in Kakamega, a town in western Kenya, has issued an order suspending the Ugandan conglomerate Sarrai Group from proceeding with the revival of the ailing Mumias Sugar Company.
Sarrai Group is a leading conglomerate of diverse and interrelated agro-manufacturing companies led by Kenyan businessman Sarbi Singh Rai, who is the group chairman.
The court action comes nearly two weeks after Kenyan tycoon Julius Mwale challenged the leasing of Mumias Sugar’s assets to Sarrai Group. Mwale claimed that the group is the least qualified to win the leasing rights, considering the amount that it offered and its technical capacity.
Prior to the recent legal action, the high court had restricted KCB-appointed receiver-manager, PVR Rao, and Mwale’s Tumaz & Tumaz Enterprises from interfering with the operations of Sarrai Group.
A day after issuing the directive, Justice William Musyoka lifted the order after it emerged that it conflicted with another order that another court had issued in December. He noted that he vacated the order to avoid the scenario of conflicting orders.
“That, the order of Dec. 29, 2021, should have been disclosed by the applicant (county government) since it cannot possibly be in operation at the same time with the order that I made herein on Jan. 11, 2022,” Musyoka said in a statement.
Earlier this week, Sarrai Group announced that it has set aside Ksh1.1 billion ($9.7 million) to kickstart operations at the sugar factory.
The capital injection will serve as the first batch of capital in the ailing miller.
The group noted that the cash infusion will play a key role in Mumias Sugar’s initial operations. Further capital injections will see the company move back to the path of sustainable growth as a going concern.
