The Kenya Commercial Bank (KCB) has placed troubled Mumias Sugar Company under receivership.
KCB appointed Ponangipalli Venkata Ramana Rao of Tact Consultancy Services as the loss-making sugar company’s receiver-manager.
KCB is one of the many creditors owed billions by Mumias.
In a letter seen by Kahawa Tungu addressed to the Company directors, Mr PVR Rao told the directors that they are required to submit the statement of the company affairs within the next 14 days.
“Please note that the Receiver may consider reasonable extension of time merits, upon your application giving your reasons for the need of such extension. Failure/Default to submit the statement of the Company’s Affairs is punishable under Section 352(5) of the repealed Company’s Act, ” the letter reads in part.
The directors have been urged to attach a list of movable and immovable assets including private and commercial vehicles in support of the statement.
Also required is a list of trade and other creditors, aged analysis of the trade and other debtors, list of bank accounts together with the balances and full particulars.
“You shall also attach particulars of insurance cover currently available, copies of valuation reports and technical assessment reports and copies of any valuation and technical assessment reports if available, ” said Mr Rao.
The directors will be expected to physically hand over original title deeds relating to the said properties, original logbooks of the vehicles and all movable assets including the motor/commercial vehicles immediately.
“If any of the original title deeds, logbooks and any movable assets are in possession of any other party, including any bank, the full details shall also be forwarded to the administrator, ” he added.
They are also required to disclose all details relating to the insurance covers available together with the particulars of any premium outstanding and the validity of the insurance cover.
Following the appointment, Rao noted that going forward, none of the directors, shareholders, employees is authorised to transact any businesses on behalf of the company without written consent from the receiver.
The company has been making losses for six consecutive years since 2013, despite several multi-billion efforts by the government to bail it out.
Most of the bailout money is said to have been misused by senior managers.
Since 2015, the National Treasury has allocated Ksh3.7 billion for implementation of the firm’s turnaround strategy in the wake of losses.
In January this year, CEO Patrick Chebosi was sent on compulsory leave.
Isaac Sheunda, a former chief security officer at the firm, took over the hot seat in an acting capacity and has been at the helm ever since.