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Citizen Weekly

Saturday 31 January 2015


Cash-starved Mumias Sugar is set to receive Sh500 million bail out package next week after the miller announced a plan to replace top managers.
Announcing the rescue plan, Agriculture Cabinet Secretary Felix Koskei said release of the funds follows a plan by the company to effect changes at the top management which are “credible and responsive to the demands of the business.”
“In the spirit of accountability, all those found to have contributed to the company’s current challenges must be held to account… as a government, we will not watch as they walk free and enjoy ill-gotten wealth,” added Mr Koskei.
Earlier Mumias advertised six top management jobs including chief finance services officer, chief agricultural service’s officer, chief factory operations officer and chief human resource officer.
It is understood that the recruitment may result in sacking some of the current managers as they will be required to re-apply for their jobs and face fresh vetting.
The vetting is to be based on results of an audit report conducted by audit firm KPMG, which is said to have linked a number of managers to corrupt deals. The report has never been made public.
“Strategies formulated will return the company to its profit-making ways and serve the needs of all stakeholders,” Mumias Sugar board chairman Dan Ameyo said on Friday.
“Stakeholders are unanimous that there is need to identify a new team that can drive the business differently,” said Mr Koskei.
The Treasury had last month set conditions that the miller presents it with a clear reform strategy as a precondition for a bail out package.
“But there has to be very clear stabilisation and reform plan which covers the short-term, medium and long-term. We can’t just blindly pump money into the miller,” Treasury Cabinet Secretary Henry Rotich said.
The company announced last year that it had renegotiated a Sh5 billion debt repayment with seven lenders as it posted a loss for the second year running.
In September, the listed miller suffered Sh2.7 billion loss for the year ended June 2014, blaming it on illegal sugar imports that depressed its ex-factory prices. It had recorded Sh1.6 billion loss in 2013.
It has also emerged that Mumias is also heavily indebted to Kenya Revenue Authority and Kenya Power.
“We intend to engage all government agencies such as KRA and Kenya Power to whom Mumias is heavily indebted to support the bail-out by putting on hold any precipitate action,” said Mr Koskei.

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