Mumias Sugar boss suspended amid probe
What you need to know:
- Mr Patrick Chebosi, the head of agriculture at the company, has been appointed to serve in an acting capacity.
- The board said the decision was reached after doubtful transactions were entered into.
- No further details were given on the nature of the reported transactions and when they happened.
The board of Mumias Sugar Company #ticker:MSC has suspended chief executive Nashon Aseka, coming just a year after he took over the helm.
In a press statement signed by board chair Mr Kennedy Ngumbau, the troubled firm says the decision was made to pave way for investigations into alleged dubious transactions at the sugar miller.
Mr Patrick Chebosi, the head of agriculture at the company, has been appointed to serve in an acting capacity until further notice.
“Following a Special Board meeting of the Company held on 5th June 2018, the board resolved to suspend Mr Nashon Aseka, the chief executive officer of the Company with immediate effect,” the statement sent Tuesday evening said.
The board said the decision was reached after doubtful transactions were entered into without following due process and requisite approvals.
“In light of the financial challenges the Company is facing, the board and key stakeholders are in discussion for fresh financial injection to restore factory operations. This will be for the benefit of the stakeholders and other stakeholders in the country.”
No further details were given on the nature of the reported transactions and when they happened.
Mr Aseka was brought in to replace Errol Johnston who quit the position following pressure from politicians in the region who accused him of failing to bring the troubled miller back to profitability despite release of a Sh3.1 billion bailout by government.
But since Mr Aseka took over the loss-making firm in June last year, it has continued to struggle due to financial constraints and a biting cane shortage attributed to poaching of raw material by rival millers that forced factory closure for two months.
Mr Aseka did not respond to phone calls made to him for comment on the matter.
Turnaround
Mr Aseka has been trying to win back confidence of farmers in the sugar zone in a bid to urge them to plant more cane to ensure its plant has adequate raw material for crushing.
The company owes farmers about Sh600 million and requires Sh20 billion to settle debts with growers, banks, staff and the taxman.
The government has been piling pressure on the firm's management to come up with a viable turnaround strategy to revive the cash-strapped miller before release of any more funds.
Mumias Sugar had announced plans to cut down its wage bill by reducing the number of employees from 1400 to 700 and slashing allowances paid to senior managers.
The proposals had been forwarded to the National Treasury but government was yet to respond.
A senior official at Mumias Sugar said no concrete agreement had been reached between management and Treasury on the release of additional bailout funds.
Prior to his appointment at Mumias, Mr Aseka had been rejected by Nzoia Sugar Company farmers after he was appointed to head the miller.
