Mumias Sugar: How Devki boss shot himself in the foot

It has now emerged that the Executive Chairman of Devki Group Narendra Raval cooked his own goose in his bid to revive Mumias Sugar Company.

According to the National Secretary General of Kenya Association of Sugar and Allied Products (Kasap) Peter Odima, Raval’s announcement that he was headed to Mumias Sugar Company to revive it opened the pandora's box.

Mr Odima, at the same, has concurred with ANC Party Leader Musalia Mudavadi that Mumias Sugar Company, having traded at the Nairobi Security Exchange (NSE) before it collapsed, the process of recruiting an investor to resuscitate it, has to be transparent.

The bidding for the lease of Mumias Sugar Company, he said, ought to have been advertised and evaluation of all bidders done in an open and transparent manner.

The Receiver Manager Pongangipalli Venkata Ramana Rao would then, make public an entity that had won the bid for the public and other stakeholders to know.

However, Odima said Rao kept the process a top secret until political leaders, sugarcane farmers and their representatives came out to publicly question the criteria that was used to lease out the company.

Rao, while being grilled by Senators, revealed that eight entities had expressed interest in reviving the trouble company.

Raval's withdrawal of his bid

The eight were Devki, Catalysis Group, Premiere JV, Sarrai Group, Kibos Sugar, Third Gate Capital Management, Godavari Enterprises, and Kruman Associates.

“It was very telling that while seven bidders chose to remain silent and allow a due process to follow, Mr Raval from nowhere emerged and started to announce how he had amassed wealth and wanted to direct Sh5billion towards the company's revival,” said Odima.

”We do not know whether Rao and Raval were testing waters to gauge reactions from Kenyans or they were serious but that where anger against Devki started," he added.

When the matter became hot with accusations directed to the Receiver Manager for allegedly secretly leasing Mumias Sugar Company to Devki, Mr Raval decided to withdraw his bid.

“Due process was followed and we were shortlisted and agreed in everything but later politics emerged,” said Raval.

Raval’s statement that he had agreed everything with Rao is what irked sugarcane farmers, politicians and other stakeholders, casting doubt over the process.

Meddling in leasing process

The withdrawal of Devki, now means only seven entities remain in the race. However, the Senate’s Standing Committee of Agriculture has directed that the process of leasing out Mumias to start afresh and everything done transparently.

Boniface Manda, a farmer, said, "Had Raval remained silent, nobody would have known that irregularities had been committed behind the scenes culminating in secret signing of lease agreement without the knowledge of the other seven bidders.”

When Rao appeared before the Senate’s Standing Committee of Agriculture, Senator Cleophas Malala posed, ”Do we have an investor as we speak right now?"

To which Rao responded, ”We have not identified any particular investor to operate the lease at the moment. We have the bids but we do not have an investor who has gotten the lease. We have not concluded with anybody.”

Meanwhile, sugarcane farmers from Western region have warned Kakamega Governor Wycliffe Oparanya against meddling in the leasing process of Mumias Sugar Company. 

The farmers accused the governor of misadvising Rao to disregard the directives of the Senate. 

“Just what did Oparanya receive from Devki? Even after Devki withdrew from the race, Oparanya is still pushing that he comes back when the farmers have rejected him (Devki),” John Otieka from Mumias said.