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Citizen Weekly

Monday, 16 February 2015

Mumias Sugar deal lands Oparanya in court

The problems facing the once giant Mumias Sugar Company are not about to end soon. This is despite the government’s gesture to see it back in full throttle in sugar production and the current plan by the Kakamega county government to extend a helping hand to the company in order to combat some of her financial constraints becoming to nil.
Kakamega governor Wycliffe Oparanya may after all not advance Sh300 million to Mumias Sugar for the factory to fight against the liquidity threat as promised. This follows a petition by former nominated councillor Gerishom Majanja at Kakamega High Court challenging the plan. In the suit, Majanja names Oparanya and the county assembly speaker as the first and second respondents respectively.
In his affidavit, Majanja acknowledges Mumias Sugar as a private entity “wholly owned by shareholders who, annually earn dividends and elect directors to manage its affairs”. One of the shareholders, he cries, is the national government through the treasury. Majanja argues that if allowed to pass, the governor will transfer the money from the county government to voters in Butere/Mumias sub county where majority of sugarcane farmers and the governor’s voters come from.
The former Pipeline managing director is a thorn in Oparanya’s flesh and a public awareness crusader. Majanja laments that the general public of Kakamega county will not enjoy a fair hearing in the assembly “because majority of members of the county assembly come from Mumias Sugar Company or sugarcane growing area”. This is if the governor were to present a request to the county assembly for approval.
 Majanja states that the governor and the speaker come from Mumias Sugarcane belt and a   sugarcane supply area to the company.  “They are known sugarcane growers and suppliers to Mumias Sugar Company. Therefore, they will be direct beneficiaries of the funds which is the motive for this payment,”he said. He points an accusing finger to former directors who should account for the factory mess.
The petitioner laments that Oparanya, being a Fellow Member of the Charter of Public Accountants should know that the county government of Kakamega is not a shareholder of Mumias Sugar Company. “The functions of the county government of Kakamega were clearly spelled out, Legal Notice No 146 of  August 9 2013 and that rescuing bankrupt private entities was not constitutionally part of its function,” he states.
In addition, Majanja states that the approved 2014/2015 budget of the count government of Kakamega did not contain a rescue package of Sh300 million to Mumias Sugar.  This, he points out, contravenes the public finance management Act of 2012.
In his application, Majanja sues Oparanya as an individual and also on behalf of the county government of Kakamega. He sues the second respondent as Mr Buluma and also on behalf of the county assembly members.  Majanja is suing as an individual. The interparty hearing is slated on February 18 2015.
Mumias Sugar Company dates back in 1967 when the government commissioned the Booker Agriculture and Technical Services to carry out feasibility studies on the viability of growing sugarcane in the former land of Nabongo Mumia, hence Mumias. The factory started operating in 1971 with farmers of Mumias Outgrowers Company supplying the bulk of the cane to the miller. Moco was the initiative of the government in 1975. Trouble started when these sugarcane farmers began getting meagre or nothing from the factory, yet it was all known that the company was enjoying monopoly of sales of her various products other than sugar since other factories were no match.
As captured in the affidavit, the Kakamega governor intends to pay Moco farmers with Sh300 million because Mumias Sugar is broke. But this is only a drop in the ocean; Mumias Sugar Company problems are equal to billions of shillings in the accumulated debts. According to the 2007 National Adaptation Strategy for Sugar Industry in Kenya, Moco members were 54,000. The factory since its full operation in 1973 has immensely contributed to about 70pc of the total amount of sugar consumed in the country annually. Some of her products were sold abroad.
Recently, the Kakamega senator Bonnie Khalwale was reported as having accused the former and immediate managers and heads of various departments of having a hand in the problems facing Mumias Sugar.