The Truth about Mumias Sugar Company recent woes

Theres a raging battle on who should manage Mumias Sugar Company. About Mumias Sugar Company Mumias Sugar Company Limited (MSC) was founded in 1971. It is headquartered in the restive Mumias Town and serves farmers in 400 kilometer square area.

There’s a raging battle on who should manage Mumias Sugar Company.

About Mumias Sugar Company

Mumias Sugar Company Limited (MSC) was founded in 1971. It is headquartered in the restive Mumias Town and serves farmers in 400 kilometer square area.

At its height, the sugar miller crushed sugarcane and produced other bi-products, such as ethanol, distilled water, and electricity, that supplemented its income. It was the largest sugar miller in East and Central Africa courtesy of good financial books, cooperative enabled farmers i.e. Mumias Outgrowers Company (MOCO).

The collapse of Mumias Sugar Company

Sugarcane poaching is the process of selling one’s sugar cane crops to a rival sugarcane crushing firm other than the one you signed the contract with.

Sugarcane poaching is the major attributive fator to the collapse of Mumias Sugar Company.

The poaching of sugarcane was engineered by rival and private sugar firm West Kenya Sugar Company.

West Kenya Sugar is owned by businessman Jaswant Rai. Some analysts have described Jaswant Rai as a rogue businessman who made sure that other sugar firm in Western Kenya engaged in sugar poaching and other unfriendly business practices leading to their collapse.

In the collapse of Mumias Sugar Company, West Kenya Sugar emerged as a big player. However, instead of crushing sugarcane, West Kenya engaged in importation of sugar from abroad. Most of the sugar imported by West Kenya was highly unfit for human consumption as the Directorate of Criminal Investigations (DCI) found out in 2018.

Following the raids, then Interior Cabinet Secretary Dr. Fred Matiang’i told local media that harmful levels of mercury and copper had been found in samples tested from the sugar seized in Nairobi’s Eastleigh area, Nairobi.

The DCI had seized over 1000 bags of the contaminated sugar and later Jaswant Rai would be found holding in his warehouse at Pan Paper Mills, metric tonnes of the same, worth over Sh250 million.

How Jaswant Rai has continued to scuttle revival plans of Mumias Sugar Company

In 2011 before cane poaching became common-place, Mumias Sugar Company was still leading the market as the largest sugar manufacturer in Kenya producing about 250 000 metric tonnes (42%) of the estimated 600 000 metric tonnes of annual national output.

Its own sugarcane plantations provided up to 7% of its annual output; its primary source of sugarcane was grown by outgrowers with some 400 square kilometers under cultivation Mumias Sugar Company co-generated over 30 megawatts of electricity which was used for its own operations and surplus was sold into the National electricity grid.

Mumias Sugar Company also manufactured about 24 million liters of ethanol annually and 20 million liters of distilled water. The company was not only a source of income for poor farmers in the Kakamega Busia, Siaya and Bungoma districts, but it also created job opportunities and curbed rural-urban migration.

Mumias Sugar Company did reduce Kenya’s dependence on imported sugar products and created a self-sustaining sugar production enterprise where outgrower farmers reaped the commercial benefits.

“There is no way Mumias Sugar Company would have collapsed if government had taken urgent measures to control cane poaching which stands out as the main factor that led to its collapse.  The local politicians on the other hand also gave it a blind eye and watched in silence as West Kenya Sugar raked havoc on sugarcane that had been contracted and developed by MSC a clear sign that they had all been pocketed. With Ethanol, Sugar, Molasses, distilled water and electricity how would this giant collapse if the cane supply was sufficient? What government was required to do at this juncture was to take charge and ensure that farmers were paid promptly so that they got encouraged to continue supplying raw material to MSC and that would have stabilised the giant Miller. So how did this cane menace start and why/how was it allowed?,” The Western Development Initiative Association (WEDIA) has always maintained.

The battle for control and monopolization of sugar sector in Kenya

In September 2019, the govt of Kenya placed loss making Mumias Sugar Company under receivership to protect its assets and maintain its operations.

KCB Bank appointed the receiver manager, one Mr. PVR Rao of Tact Consultancy Services. A few consultations later, Rao leased the Mumias Sugar to Sarrai Group Limited, Sarbjit Singh Rai. Sarrai Group was chosen for it’s good business acumen.

Fast forward to 2023, Jaswant Singh Rai of West Kenya Sugar has managed to convince government, courts and the media that his brother Sarbjit Singh Rai of Sarrai Group should not run Mumias Sugar Company.

Jaswant has four Sugar Factories in Kenya namely West Kenya Sugar situated in Malava in Kakamega County, Sukari Industries of Ndhiwa in Homabay County, Olepito Sugar situated at Tangakona area in Busia County and the latest entrant Naitiri Sugar in Bungoma County. Simply put, Jaswant has created a monopoly and it doesn’t benefit the local farmers. He impiorts sugar from abroad, repackages them at Pan Paper Mills in Webuye and sells them to Kenyans.

With all these sugar factories the man still wants to add Mumias Sugar Company to himself. That is where WEDIA reads a sinister motive.

His bid to take over Mumias, was rejected by Ponangipalli Rao who was the Company’s Reciever manager.

Rao said that if the bid was awarded to West Kenya, it would amount to a dominant position as the Rai Group which owns West Kenya, controls atleast 41% of the daily total Sugarcane crushing capacity in the Country.

Sarbjit of Sarrai Group

On the other hand, Sarbjit owns Kinyara Sugar and Hoima Sugar both in Uganda all under Sarrai Group and with each having a success story to share. It is from this background that the Receiver manager, Ponangipalli Rao, developed confidence in Sarrai and saw his capability to run Mumias Sugar Company hence awarding him a 20-year lease.

In 2011, rthe now defunct Kenya Sugar Board (KSB) used the same reasons to reject West Kenya’s application to set up a factory in Busia on grounds that it had a functional Sugar Mill in Malava in Kakamega County and at the same time holding an operating license for Bilibili site in Bungoma County.

Sarrai Group not interested at first due to politics

 What Kenyans should also know is the fact that KCB, The Treasury and the Ministry of agriculture had earlier invited Sarrai to come to Kenya to revive Mumias having seen his capacity after visiting the two sugar factories he owned in Uganda. He was initially not interested as he had anticipated these wars but later accepted after several considerations.

For Jaswant had wanted to have the Mumias Sugar nuclears where his plans were to transport Sugarcane to his companies and hence KCB believed they couldn’t recover their money with Jaswant being in control of Mumias.

It is in the same manner that Jaswant acquired a once vibrant Panpaper Mills in Webuye at a throw away price of Ksh900 Million after duping the people of Western and Bungoma, to be precise, that he was going to revive it only to turn it into a Godown to stock cheap illegal sugar. He now brings paper from his Mufindi Paper Mills in Tanzania.

Lying to the Kenyan media

To have his plans look good, Jaswant has pocketed the media. This is long after pitting farmers against their sugar factories, bribing local and national leaders from Western Kenya and using the courts to accept trumped up charges against Sarbjit, of Sarrai Group.

The Kenyan Media has failed to act as the farmers’ watchdog and has allowed itself to be used by Jaswant to drive a false narrative about Sarrai. The end game is to take over Mumias Sugar Company.

To back up these claims, below is an audio recording of General Manager of West Kenya Sugar asking a journalist to help write negative articles about Sarbjit Rai of Sarrai Group. The journalist rejected and exposed what has been going on.

AUDIO (click here to listen)

https://een8jo53vqo.exactdn.com/wp-content/uploads/2023/06/Audio-Mumias-Sugar-Company-_merge.mp3

However, such negative articles about Sarrai Group and Mumias Sugar revival plans have appeared in the mainstream media, specifically Business Daily and TheStarKenya.

A good example is a full page story that appeared in the Business Daily on 31st May 2023 with the header, ‘Loaders Pile More Woes On Sarrai In Battle For Mumias’. And to show clearly that this was a sponsored story to push Sarrai out of Mumias the Media House went ahead to add a subheading saying, “Workers Want The President To Fullfill His Pledge To Replace Firm With New Receiver Manager’.

 There’s an ongoing case at the Kenyan Judiciar, in which TheStarKenya has covered and made good use of S.E.O tactics,  where Jaswant Rai has managed to penetrate and pocket. Recently (May 17th 2023), High Court Judge Donna Chepkwony ruled that Sarrai Group Directors should show cause why they should not be commited to civil jail for contemot of court.

The contempt of court is about Sarrai Group undertaking operations in revival plans for Mumias Sugar Company while the court, having accepted lies from Jaswant Rai, said operations should stop.

To rush matters, not giving the other party time to respond, the case on 18th May 2023, was reported to be before Justice Alfred Mabeya, who said he was not conversant with the case and that Justice Donna Chepkwony should issue a rulling.

“I cannot handle this matter. I, therefore, direct (Justice) Josephine Mungare to issue a sentence on June 15, to show cause why the accused should not be imprisoned,” Justcie Mabeya said.

The court was told that Sarrai continued to operate at the firm two weeks after the court orders were issued barring them from operating.

Lawyer John Khaminwa said Sarrai is in contempt of two directives one of July 2022 and April 2023.

High Court Judge Donna Chepkwony who is now on transfer ordered them to pay Sh100, 000 or serve six months in jail.

Fuming creditor reads mischief in the case against Sarrai Group

A day earlier, Mumias Sugar Creditor, Jackline Kimeto wrote to Chief Justice Martha Koome and Judicial Service Commission (JSC) criticizing the way the Court of Appeal has handled the lease case.

She said they have been dragged into circus and controversy by the Court of Appeal in Civil Application No. E185 of 2023 — Sarrai Group Limited v Kimeto & Associates & others.

“The hearing date fixed for E 185 does not even allow the parties to comply with the directions of the court as it is issued before the timelines in the directions lapse thereby compromising the 1″ Respondent’s right to be heard.

“Furthermore, it is not clear how decisions were made between Friday evening and Sunday morning to issue a hearing date in this matter for Tuesday 16th May 2023 giving parties only 1-day notice of the hearing of the Application. In this history of judicial proceedings in this country one will struggle to find a court that gives a respondent a single day’s notice to appear for hearing,” Kimeto indicated in the letter.

Kimeto also wants Court of Appeal President Justice Asike Makhandia investigated.

“I am requesting the Judicial Service Commission to urgently cause investigations to be conducted into Mr Justice Makhandia’s actions and conduct as Acting President of the Court of Appeal and in particular, on how Civil Application Nos. E185 and E187 were fixed for hearing on a Sunday and even before E187 was served, or directions issued in respect of its hearing and filing of responses; and notwithstanding that the filing timelines imposed in E185 had not lapsed,” she added.

Conclusions

 Jaswant Rai’s agenda is black and white underhand tactics to scuttle revival of Mumias Sugar Company so as to maintain monopoly and drive farmers into poverty.

Most sugar farmers don’t know this; they were misused, sometimes with violence to aid in suagar poaching leading to collapse of Mumias Sugar Company.

Jaswant Rai doesn’t care about revival of Mumias Sugar Company. Neither does he care about development of Sugar Sector in Kenya.

He cares about the profits he makes out of illegal importation of sugar into Kenya

In 2018, when the DCI raided his Raiply Paper Mills formerly Panpaper in Webuye, illegal Sugar worth Ksh250 Million was nabbed.

After cases of sugar suspected to be laced with mercury were reported in the Country, the sugar that was seized at the Raiply Mills was also taken for tests in the same year where same results were declared.

He was cleared by the Senate Committee which was led by former Kakamega Cleophas Malala, who told the country that after licking the sugar he found it fit for consumption. Mr Malala is now the Secretary General of the ruling party, UDA (Kenya Kwanza).

Jaswant’s smear campaign against his brother Sarbjit Rai of Sarrai Group continues, but thois article seeks to shed light and ultimately stop this Uhuru Kenyatta era rogue businessman who should not be embraced by William Ruto.

Sarrai Group under Sarbjit won the tender to operate Mumias Sugar Company for the next 20 years.

Specific example of negative articles

A good example is a full page story that appeared in the Business Daily on 31st May 2023 with the header, ‘Loaders Pile More Woes On Sarrai In Battle For Mumias’. And to show clearly that this was a sponsored story to push Sarrai out of Mumias the Media House went ahead to add a subheading saying, “Workers Want The President To Fullfill His Pledge To Replace Firm With New Receiver Manager’.

The issue here is not about the incapability to run MSC but the President replacing the Sarrai with a new Receiver Manager. Many would ask who is this new Receiver manager that is supposed to replace Sarrai incase President William Ruto fullfils his promise as stated by the said Loaders.

What Kenyans and Sugarcane Farmers in particular should know is that there is enough evidence to show that Jaswant is now financing the campaign against Sarrai with the aim of seeing him out of Mumias so that he can take over and monopolize the sector.

What Jaswant vowed since 2011 when he first set up a Weighbridge within Mumias Sugar Zone at Tangakona in Busia County was to make sure that the once giant sugar Miller which used to command East and Central Africa is dead so that he can take over as the leader in the market.

It is common knowledge that Jaswant is not ready to allow Mumias Sugar Company to roar back to life under a different person if not himself for obvious reasons. He knows very well that if left undisturbed, MSC would roar back and it would push him out of business so he would rather push it into the grave for good rather than see it operating under a different person something that Kenyans should know that it is not all about his brother Sarbjit.

The people of Western Region whose economic backbone has always been Sugarcane farming should therefore keenly follow these happenings to see whether the Government of Kenya shall succumb to Jaswant’s financed anti-Sarrai campaigns and pressure.

About Jaswant Rai

Jaswant Singh Rai is a Kenyan businessman with interests in agriculture, timber, cement, edible oils, real estate and horticulture.

Companies that Jaswant Rai owns

Specific companies that the Rai’s own include West Kenya Sugar, Menengai Oil Industries Limited, RaiPly, Tulip Properties, and Webuye Pan Paper Mills.

  • Under Agriculture: West Kenya Sugar, Sukari Industries, Olepito Industries, Rai Agriculture Enterprises Ltd
  • Sawmilling: RaiPly and Timsales
  • Edible Oil: Menengai Oil Industries
  • Cement: Rai Cement
  • Real Estate: Tulip Properties
  • Manufacturing: Webuye PanPaper Limited (Kenya) and Mufindi Paper Mills in Tanzania.
  • Jaswant Rai’s net worth

    After his father’s death in 2010, Jaswant Rai became the chairman of the family businesses under Rai Group. Jaswant is also the executor of his father’s will. His father Tarlochan Singh Rai was an astute well-connected businessman. Estimated wealth are in billions of shillings. Tarlochan Singh Rai left behind money in an account at Absa, all estimated to be worth Sh329 million, and he had no liabilities, according to his son Jaswant. 

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