Shareholders blamed for near collapse of Mumias Sugar Company

What you need to know:

  • In an interview with Nation.co.ke on Wednesday, Mr Langat said the absence of one person or party to be accountable created space for the management of the sugar factory to sleep on the job, thereby causing major losses to the investors.
  • Chebirir Sugarcane Farmers’ Cooperative Chairman Kipng’eno Langat said farmers are owed by Muhoroni Sugar Company close to Sh30 million for sugarcane delivered to it by 30 cooperative societies in the constituency over the last six months.

National Assembly Finance, Trade and Planning Committee chairman Benjamin Langat has blamed the near collapse of the gigantic Mumias Sugar Company on the presence of more than a million shareholders.

In an interview with Nation.co.ke on Wednesday, Mr Langat said the absence of one person or party to be accountable created space for the management of the sugar factory to sleep on the job, thereby causing major losses to the investors.

He said this situation had turned Mumias Sugar Company into a shell of its former self.

“When there are one million people who are shareholders with each having one or two shares, no one really owns the company and accountability is thrown out the window. None of the farmers had a visible ownership of the company and the management therefore had a free hand to do as they pleased,” he said.

The Ainamoi MP has now proposed a new model for privatisation of sugar factories and other government owned investments in the country.

He has proposed that each company being privatised should have one major investor, who will purchase at least 51 per cent of all the available stock, with farmers who have interest in the said fields being given a chance to own between 24 and 35 per cent of the company’s shares.

“This will ensure that there is somebody who is recognised as the owner of the company, somebody who will have invested heavily in the company that is being privatised to an extent that he or she is willing to do everything to make it profitable,” he said.

Mr Langat’s comments came as residents of his Ainamoi Constituency in Kericho County called for the privatisation of the Muhoroni Sugar

Chebirir Sugarcane Farmers’ Cooperative Chairman Kipng’eno Langat said farmers are owed by Muhoroni Sugar Company close to Sh30 million for sugarcane delivered to it by 30 cooperative societies in the constituency over the last six months.

The Chairman noted that unless Muhoroni Sugar Company and Chemelil Sugar Company, the two government owned sugar millers were privatised, the situation was bound to get worse.
“We really hope that the process of privatising these factories will be sped up by the government so that they can become more efficient. The last time farmers in my society received payment from Muhoroni Sugar factory was in February due to poor management,” he said.

Just weeks ago in an interview, Sigowet/Soin MP Justice Kemei called for the arrest and imprisonment of all former executives of Mumias Sugar Company who are accused of bringing the company to its knees through corruption and poor management.

The MP also called for an overhaul of the company’s management to pave way for a new team which will be charged with using the bailout funds given to the company prudently in a bid to help it restore its lost glory.

Mr Kemei likened the saga at the troubled sugar miller to the Anglo Leasing and Goldenberg scandals.