Activist files petition challenging businessman Ramana Rao as receiver of Mumias company

Businessman Ponangipalli Venkata Ramana Rao.

Activist Okiya Omtata has filed a petition seeking to temporarily suspend Businessman  Ponangipalli Venkata Ramana Rao as the Receiver Manager of Mumias Sugar Company Limited.

Omtata argues that the matter is extremely urgent since on 9th June 2021 or thereabouts, the Senate’s Agriculture Committee looking into the affairs of troubled Mumias Sugar Company directed the the Receiver Manager, to within 14 days re-advertise the bid to salvage the troubled Mumias Sugar Company,

He says that it is only when he was summoned to the Senate that he disclosed that he had invited the following eight companies to bid: Catalysis Group Russia, Sarrai Group Uganda, Kruman Associates, France, Kibos Sugar, Devki Group, Premier JV India, Third Gate Capital Management and Godavari Enterprises, India. 

According to the activist, the Senate got involved after it emerged that the Receiver Manager was engaged in a secretive bidding process to purportedly identify a strategic investor for the Company. 

It has also emerged that none of the eight bidders he secretly invited to bid had the capacity to revive the Company, leading to fears that a plan was underway to dispose of the company off to the Receiver Manager’s cronies for song. 

“The fears that the Receiver Manager is conflicted were further reinforced by the fact that while he was the receiver manager at Kwale Sugar Company, he sold scrap metal to the purported lead bidder, Devki Steel Millers Ltd and at the time the receiver manager took over the Company to ostensibly “protect its assets and to the best extent maintain its operations,” the company was processing ethanol, from molasses bought mainly from the neighbouring Butali and Busia sugar companies,” says Omtatah. 

He further argues that instead of reviving the company, the Receiver Manger mismanaged the ethanol operations and shut them down in March 2021, thus halting all manufacturing operations at the company. Also, without proper planning, he ploughed 677 HA of the Nucleus Estate but failed to plant sugarcane on some 307 HA, letting the effort go to waste. 

The activist adds that the petitioner is aggrieved that close to two years after taking over in 2021, the receiver manager has not done any of the following published a general statement of affairs on the assets and liabilities of the company as at the time he took over and made known the efforts he has taken to protect the assets of the company and the interests of investors (including farmers), creditors, and other parties. 

He is also yet to publish periodic reports on what he has done to reduce the KCB Group debt that is responsible for the receivership or published a general statement of affairs on the current state of the assets and liabilities of the company. 

“It is clear that the receiver manager who has been on site for some two years now has failed in his mission to protect the Company’s assets and to the best extent maintain its operations. Instead, he has completely shut down the company and is en route to nailing the last nail in the coffin of Mumias Sugar Scheme,” states the activist.