Sugarcane farmers and local leaders in Mumias are calling for a thorough investigation into the financial records of Mumias Sugar Company, currently under the management of receiver PVR Rao.
This follows revelations of a Kes 3.5 billion tax debt, raising concerns about financial mismanagement at the struggling miller.
The farmers are also demanding that KCB Bank, which placed Mumias Sugar under receivership in 2019 to recover a Kes 545 million (US$4.2M) debt, disclose a detailed financial report covering the company’s management and operations since the takeover.
During a news conference in Mumias, former Mumias MP Wycliffe Osundwa and other stakeholders expressed shock over a recent Tax Appeal Tribunal ruling, which granted the Kenya Revenue Authority (KRA) permission to collect tax arrears from the company. Osundwa questioned how such a massive debt was accumulated, despite the company possessing substantial assets at the time of the receivership.
“When taking up operations, there were 700 50kg bags of sugar worth Kes 4.2 million (US$32.5K), 685,000 litres of ethanol valued at Kes 274 million (US$2.12M), and standing cane in the nucleus worth Kes 170 million (US$1.3M). Where did all this money go?” Osundwa asked.
The statement further pointed out that various companies had procured ethanol on credit, with payments being made directly to the receiver manager’s account. Additionally, the ethanol plant was operational from February 2020 to December 2021, producing 2.2 million litres worth Kes 880 million (US$6.8M), raising further questions on revenue accountability.
Local leader Ralph Wangatia criticized the current Mumias Sugar investor, arguing that they lacked the capacity to operate the ethanol, co-generation, and water plants—potential alternative revenue streams that could have bolstered the company’s finances.
Concerns were also raised about the valuation of Mumias Sugar’s assets. On February 3, 2025, Centenary Valuers was tasked with assessing the company’s assets. However, reports indicate that they were allegedly not provided with a full list of plant machinery, resulting in an incomplete valuation.
Sugarcane farmer Raphael Welimo further claimed that for over a month, there had been cases of asset stripping within the ethanol and co-generation plants, sparking fears of deliberate equipment cannibalization.
Sony Sugar Stakeholders Seek Government Assurance
Meanwhile, stakeholders at South Nyanza Sugar Company (Sony Sugar) are seeking government clarity on the ownership and leasing terms of community-donated land as the miller prepares for privatization.
Speaking on behalf of the Awendo community, MP Walter Owino stressed that local stakeholders must be informed whether the government intends to lease both the factory and the land or if the land will remain under community control.
“The nuclear land for the company was donated by the people of Awendo. They deserve to know the fate of the land before the leasing process is finalized,” Owino emphasized.
Additionally, he urged the government to guarantee job security for existing employees before finalizing any leasing agreements.
With both Mumias Sugar and Sony Sugar at the center of intense scrutiny, sugar industry stakeholders are pressing for greater transparency and accountability to safeguard the future of the sector.
