Mumias Case:Vartox Resources Inc. want to cross-examine Mumias Receiver manager PV Rao

Lawyer Paul Muite submitting during the hearing of the Mumias Sugar Co. lease case. Photo/Suek

Vartox Resources Inc. and West Kenya Sugar Company want Mumias Sugar receiver manager and Kenya Commercial Bank CEO Joshua Waigara to appear in court for cross examination in the company’s lease case.

Through lawyer Ismael Abbas, Vartox wants the receiver manager Ponangipali Venkata Ramana Rao to be cross-examined over failure to produce a detailed valuation report as ordered by the court.

“It has become necessary for Rao to be cross-examined on the inconsistencies, falsehood and cover up that he has engaged in during his time as receiver manager of Mumias and in his recent actions to lease the assets of Mumias Sugar to Sarrai Group Limited,” Abbas submitted.

The court had that Vartox’s application dated 28th January 2022 is under the insolvency Act 2015, there is no provision for a viva voce (oral) hearing unlike in civil cases. This makes it impossible for the applicant to question Rao on the many inconsistencies to bring him to account for his role as administrator and receiver of Mumias.

In addition, Abbas submitted that Rao has conducted himself in a manner so as to disenfranchise the creditors and other stakeholders of Mumias which has a debt portfolio exceeding Sh 30 billion. He noted that affairs of Mumias are a matter of significant public interest as held by this court on 19th November 2021.


West Sugar support

West Sugar, through Senior counsel Paul Muite, supported the application saying Rao and KCB should come and explain the inconsistencies.

According to Muite it is gross misconduct for Rao to have disposed off or attempted to lease off Mumias properties at Sh 6 billion and rejected 36 billion.

“West Sugar, being the highest bidder of Sh 36 billion has a direct interest in the removal of Rao as administrator,” Muite submitted.

Muite reiterated that an explanation is due from KCB and Rao to tell the court whether some money was clandestinely changing hands.

“He should not only be removed as an administrator, his conduct makes him unsuitable for a receiver or administrator,” Muite added.

According to West Sugar, Rao should be removed as an administrator as his conduct makes him unsuitable for a receiver or administrator.

“When a party who has been appointed by the court does not avail the lease, what is he hiding?” Muite questioned.