Jubilee auctioned western economy at low price in Pan Paper deal, official says
Pan Paper Mills in Webuye which collapsed in 2009. FILE PHOTO | NATION MEDIA GROUP
What you need to know:
- Federal Party of Kenya (FPK) leader Andrew Kutitila, speaking at a funeral in Bungoma County, said it was wrong for the government to sell the facility at such a throwaway price, adding that it was valued at Sh18 billion.
- Pan-African Paper Mills collapsed in March 2009 and was placed under receivership. The government held a 40 per cent stake in the company, and it had deep-pocketed shareholders like the International Finance Corporation (IFC).
- The IFC had given the miller a $50 million loan (Sh5 billion at today's exchange rate), but it was struggling, and only managed to pay off about half the debt. It had $26 million (Sh2.6 billion) still outstanding.
The government has been criticised for disposing of Pan Paper Mills in Webuye for Sh800 million and accused of destroying western Kenya’s economy.
Federal Party of Kenya (FPK) leader Andrew Kutitila, speaking at a funeral in Bungoma County, said it was wrong for the government to sell the facility at such a throwaway price, adding that it was valued at Sh18 billion.
Speaking during the burial of Phylis Atiang'a Ibanda in Sikhendu, Mr Kutitila said the firm was crucial in western Kenya’s economy and should not have been sold.
Ms Atiang’a was the wife of former district commissioner Davis Chelogoi.
"The company's property in Nairobi alone is worth over Sh5 billion. The firm was a great employer in western Kenya and supported many families yet the Jubilee government has watched it being sold at a low price. The buyers of the firm are well known," Mr Kutitila said.
He accused President Uhuru Kenyatta's administration of graft and running down western Kenya’s economy.
'ROTTEN' GOVERNMENT
He cited the multibillion-shilling National Youth Service and the Health Ministry scandals as a show of increasing theft of public resources.
"I wonder why western Kenya leaders are leaning towards the government yet its impoverishing its people. This government is rotten. How could people steal money [meant] for drugs," said Mr Kutitila, who is also the Sikhendu Ward representative.
Also present at the burial was Endebess MCA Patrick Kisiero and former Kitale deputy mayor Pius arap Kauka.
Pan-African Paper Mills collapsed in March 2009 and was placed under receivership. The government held a 40 per cent stake in the company, and it had deep-pocketed shareholders like the International Finance Corporation (IFC).
The IFC had given the miller a $50 million loan (Sh5 billion at today's exchange rate), but it was struggling, and only managed to pay off about half the debt. It had $26 million (Sh2.6 billion) still outstanding.
In addition, the firm had a total debt portfolio of long-term loans of Sh7.2 billion, which sank it into seven years of trouble.
The firm was sold early this year.
