Dirty deals sent former Mumias Sugar bosses home, says Felix Koskei

Former Mumias Sugar Company chief executive Peter Kebati and two top managers were sacked for sidelining board of directors in decision-making causing the miller losses.

Agriculture Cabinet Secretary Felix Koskei on Tuesday told the Agriculture Parliamentary committee, that the trio also colluded to mislead the board on accounts collectively and in their individual capacity.

Mr Kebati, for example, arbitrary set up an illegal account at Dubai Bank instructing customers to deposit money in it.

Mr Koskei said the former chief executive failed to inform the board of its existence as required.

Mr Kebati, also awarded tenders worth over Sh150 million without seeking the board’s tender committee approval.

He was also found culpable of misinforming the board that management was no longer selling imported sugar yet proceeded to illegally authorise discounted disposal.

“He was aware that insufficient due diligence had been carried out on a third party agent and he oversaw the award of the sugar importation contract to this agent,” Mr Koskei said.

DUMPING CHEAP SUGAR

Mr Kebati, who took over from Nairobi Governor Evans Kidero in 2011, was suspended in April alongside commercial director Paul Murgor and company secretary Emily Otieno to pave the way for investigations into claims of the company’s involvement in dumping of cheap sugar in the country among other corruption allegations.

According to Koskei, Mr Murgor was found guilty of failing to implement the company’s sugar pricing formula while illegally approving credit noted for sales of the product that enabled selected customers to enjoy extra discounts.

“He approved a price variance analysis in support of credit note issued to customers thus effecting old prices despite a separate communication on new prices,” Mr Koskei told the legislators.

The former commercial director was also found guilty of colluding with transporters to divert goods destined for inter-warehouse transfers into the market without being surcharged as is required.

Termination of the services of Mrs Otieno was based on the fact that she prepared legal documents for a supplier to Mumias yet her husband held a directorship at the firm that was to do the job.

She was culpable for failure to establish conflicting clauses in an agreement between the company and a third party that Mr Kebati illegally awarded a sugar importation tender.