Sugarcane farmers and local leaders in Mumias want investigators to comb through the books of Mumias Sugar Company under receiver manager PVR Rao over a Sh3.5 billion tax debt.
They also want KCB which put Mumias Sugar under receivership, to make public a financial report since it took over the management of the miller in 2019 to recover Sh545 million debt.
At a news conference in Mumias, the farmers said they were shocked by a recent ruling by the Tax Appeal Tribunal that allowed Kenya Revenue Authority to collect Sh3.5 billion in tax arrears from Mumias Sugar.
In a statement read by former Mumias MP Wycliffe Osundwa, the group wondered how the company had accumulated such tax arrears.
According to Osundwa, at the time the receiver manager took over, there was ethanol and sugar in the store, besides acres of standing cane.
“When taking up the operations of the company, there were 700 50kg-bags of sugar worth Sh4.2 million and 685,000 litres of ethanol worth Sh274 million.
“There was also standing cane in the nucleus valued at Sh170 million. Where did all these monies go?”
The statement said other companies had procured ethanol on credit, money that was later paid to the receiver manager’s account.
“The receiver manager commenced operations for ethanol in February 2020 till December 2021 and produced a total of 2.2 million litres worth Sh880 million,” the statement said.
Another leader, Ralph Wangatia, claimed that the current Mumias Sugar investor had no capacity to run ethanol, co-gen and water plants, which are alternative revenue streams.
“The feeling is that the revenue being generated by the receiver manager appointed by KCB signifies growing debt instead of reducing.
“The conclusion us that Mumias Sugar Company is being driven to its knees. Matters are getting worse than it was before,” he said.
Wangatia wondered how the Rao started the operations in Mumias just two months after taking over.
“The receiver manager appointed by KCB commenced operations only two months after receivership. The one-million-dollar question is, where did he get the cane, which was insufficient at closure?
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“We now demand an elaborate report from the receiver manager appointed by KCB to bring us up to speed on the entire process, and for EACC to start investigations.”
On February 3, 2025, Rao deployed Centenary Valuers to carry do a valuation on Mumias Sugar but they were allegedly not given a whole list of some plant machinery and as a result, the valuation report was not completed.
Sugarcane farmer Raphael Welimo claimed that for more than one month now, cannibalisation of equipment has taken place inside the ethanol and co-gen plants.
The latest incident occurred on February 25, 2025 and was subsequently reported at the Booker Police Post.
“We are aware that the ethanol plant has been vandalised and even the culprit was arrested…and no action was taken despite the fact that the management was aware,” said Welimo.
