Mumia Sugar Company gate.(Inset) Receiver Manager Ponangipalli Venkata Ramana Rao.
Cane farmers want the receiver manager of Mumias Sugar Company, Ponangipalli Venkata Ramana Rao , investigated over Sh3.5 billion tax arrears.
The farmers were shocked when the Tax Appeals Tribunal gave the Kenya Revenue Authority (KRA) the greenlight to recover the arrears from the miller.
Former Mumias Member of Parliament Wycliffe Osundwa is among those questioning Mr Rao's operations that led to failure to remit taxes.
“Mr Rao found 700 bags of sugar, each weighing 50kgs worth Sh4.2 million. Also, he found 685,000 litres of ethanol amounting to Sh274 million and standing cane in the nucleus valued at Sh170 million. Where did these money go?” Mr Osundwa asked.
Suspect transactions
The former MP, who was flanked by sugarcane farmers and a group of eminent persons at a press briefing in Mumias, said that other companies which had also procured ethanol on credit had been paid.
“The receiver manager commenced operations for ethanol in February 2020 through to December 2021. He produced a total of 2.2 million litres, translating to Sh880 million. It is shocking that profit was being made but Mr Rao was not paying taxes," they claimed.
The ex-MP said that the Tax Appeal Tribunal had issued a verdict which lifted the lid of massive underhand dealings at the company.
The farmers and leaders now ant the Ethics and Anti-Corruption Commission and the Directorate of Criminal Investigation (DCI) to investigate the suspect financial transactions, particularly between September 20, 2019 and December 21, 2021.
The once giant sugar miller was put in receivership by the Kenya Commercial Bank (KCB) on September 20th, 2019, due to its inability to service its financial obligations with various creditors.
KCB’s debt at the time stood at Shs545 million and the bank was to run Mumias Sugar and recover their money.
Loaders hang on to a tractor transporting sugarcane to Mumias Sugar Factory in February 2018.
“KRA is demanding Sh3.5 billion in tax arrears as at 2023. We demand an elaborate financial report from Mr Rao on how they have been able to run the company for the period under review,” said Mr Osundwa.
Dr Ralph Wangatia wondered how Mr Rao operationalised ethanol just two months after being appointed Mumias Sugar receiver manager but failed to remit taxes.
“KCB’s debt was Sh545m but a look at what was inherited by the receiver manager and money made from ethanol is extremely bigger than the debt. Mumias Sugar is under Receiver Manager appointed by KCB and Sh3.5b tax is to be paid, there is more than what meets the eye,” said Mr Wangatia.
He wants a status report of the company's both moveable and immovable assets made public for the period before and during Mr Rao's tenure.
“The six-million-dollar question is where did the receiver manager get the cane that was insufficient at closure? There was no feasibility study and or survey conducted and even a valuation report done,” Mr Wangatia pointed out.
A sugarcane farmer from Matungu, Raphael Welimo, alleged that for more than one month now, massive vandalism has been meted on both ethanol and co-gen plants inside Mumias Sugar factory.
“On February 25, 2025, a suspect was arrested and booked at the Booker police post as OB No 09/25/2/2025. We are aware the ethanol plant was vandalized and even the culprit was arrested but no action was taken despite management having been aware,” alleged Mr Welimo.
The farmers have given the receiver manager at Mumias a 14-day ultimatum to make public the status report of the company lest they initiate a legal process to demand kick out the KCB.
“We are feeling that the revenue being generated by the receiver manager appointed by the KCB signifies a growing debt instead of reducing it. In view of the above, we are conducting our legal team to investigate and interrogate the receiver manager and KCB before take legal action,” pointed out Mr Welimo.
smakokha@ke.nationmedia.com
