Khalwale: Kidero pocketed Sh500m

The controversy surrounding the troubled Mumias Sugar Company continues after allegations emerged in court that more than Sh500 million may not have been remitted to the miller’s bank account.

Embattled Kakamega Senator Boni Khalwale is relying on a sale agreement said to have been entered between the miller and a wholesaler, to partly justify his assertions that Nairobi Governor Evans Kidero, a former Mumias managing director, played a role that led to the company’s financial woes.

The defamation case against the senator was filed by Dr Kidero who is aggrieved by remarks he claims Dr Khalwale made during a presidential function in Mumias.

President Uhuru Kenyatta toured western region in June and presented a Sh1 billion bailout cheque to the company and announced a revival strategy that includes undertaking a rights issue to raise about Sh4 billion.

Senator Khalwale claims in court papers that on April 23, 2012, Dr Kidero, who was then managing director, received Sh650 million in cash on behalf of the company from YH Wholesalers for the sale of 13,450 metric tons of sugar.

“The said money was never deposited in the Mumias Sugar Company account nor an account of the said amount given by Dr Kidero,” said Dr Khalwale in his court papers.

Further, the Kakamega Senator alleges that Dr Kidero authorised payments totalling Sh900,000 in the months of July to December 2008 in the name of Mr Abdul Mwasera, the then Western Provincial Commissioner, a senior official in the Deputy President’s office for security services to Mumias that were allegedly never rendered.

“If at all any services were rendered by the security personnel of the office of the Provincial Commissioner, Dr Kidero should have paid the monies for services rendered directly to the Ministry of Internal Security,” explained Dr Khalwale.

However, Dr Kidero said that at no time has Mumias Sugar accused him of not remitting proceeds of sale of sugar.

“In fact, it was not even tenable for a managing director to be paid directly by a supplier for services rendered to the company, as Mumias has always had structures including a finance director accountable for proceeds of sale of the company products,” Dr Kidero said.

In 2008, Mumias hired the services of police officers to assist in warding off cane poachers in its sugar zone.

“The procurement of security services of the police officers was necessary to guarantee availability of cane to Mumias Sugar and to prevent loss of cane developed by Mumias Sugar company to competitors,” Dr Kidero said.

He added that payment was made to the government through the Interior ministry representative in the region, Mr Mwasera.

He said it was clear from Dr Khalwale’s response that the senator did not consult him before making remarks about him at the presidential function.

On Friday, Dr Kidero’s lawyer Tom Ojienda and Mr Ahmednasir Abdullahi for Dr Khalwale had heated exchanges in court. The case will be heard on September 3.