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How Muhoroni Sugar Cartels Made Ksh3.9 Million By Sneaking Out Spare Part, Resupplying It

muhoroni sugar, walter odum
MUHORONI SUGAR. / COURTESY
muhoroni sugar, walter odum
MUHORONI SUGAR. / COURTESY

In 2008, an Indian company by the name Surendhra Engineering Ltd was contracted by the Muhoroni Sugar Company Limited to supply and install the steam boiler and thereafter commission it.

This would be one of the biggest loophole for cartels at the company to loot, according to our investigation.

In the year 2016 during the factory’s annual maintenance routine, the cartels lead by the factory manager Walter Odum and his electrical section colleagues resorted that the motor driving the boiler fan be returned to Surendhra Engineering Ltd through it’s little known agency in Nairobi. They termed it as faulty, even after using it for over eight years.

The agreement to return any part of the boiler equipment to the Indian supplier was not enshrined in the supply contract, and was instead a fabrication by the cartels to have a way of getting money from the same.

The Indian supplier denied links with the Nairobi individual who was positioned as the suppliers agent. 

In their (Cartels) quest to have the 200kW motor taken out of the factory for resupply, they approached a one deceased Tobby alias Sonko, a scrap dealer from Awasi to purchase the motor at a cost of Ksh500,000.

Sonko offered them Ksh300,000 which they declined and hence proceeded on to sell the motor to a company in Kisumu located along Obote Road called Allied Industrial Supplies at a cost of Ksh500,000 with surety of getting an LPO to resupply the motor back to Muhoroni Sugar.

Allied Industrial Supplier was a supplier in the same factory and hence the cartel’s plans to have the motor in custody of a prequalified supplier for guaranteed re-supply rights was successful.

A few weeks later, the need for a coupling pulley that was sold attached to the motor arose since the one installed was not compatible with the fan shaft. The general manager Mr. Nicholas Okello then recalled the factory manager Mr Walter Odum who was on leave for a meeting to chat the way forward in the presence of the then receiver manager Mr Asa Okoth.

In a meeting chaired by the general manager, the supplier Allied Industrial Supplier was contacted to sell back the pulley which he declined citing that the pulley can only be sold as a complete unit with the motor which he agreed to sell at Ksh500,000. After a short while, the Asian supplier, Allied Industrial Supplier called the factory with a change of price to Ksh3.9 million.

This was a very exorbitant price since a new motor would have costed approximately Ksh1.5 million shillings. The cause of this change of mind was not known with the cartels in the meeting pretending to know nothing. 

The general manager then decided to travel to Kisumu in company of the electrical engineer Edward Alango and the factory manager Walter Odum to negotiate with the supplier. Upon their arrival, when they asked the supplier about his sudden change in price, he confirmed to the team that one of their electricians Mr Joab Agwenge Sunday and an unknown person had been to the supplier’s office where they imposed as Engineering manager (Joab Sunday) and the procurement manager.

The two impostors caused the supplier to hike the price from Ksh500,000 to Ksh3.9 million. According to the supplier, he was not ready to bargain a second time since he had finalised on the price with the first team. The client (Muhoroni Sugar Company Limited) had no other choice but to purchase this motor at that price with payment made upfront in full.

Read: Muhoroni Sugar Shuts Down Amid Tax Evasion Claims

“Joab Sunday proved that he is untouchable when his conduct was discussed in a series of meeting chaired by the receiver managers and other meetings by the general manager and no actions taken against him. He has since continued to thrive and still walk high headed boasting and cheering his cartel boss Walter Odum in meetings where the later intimidates and lectures factory staffs,” says an insider source.

The proceeds from these kind of dealings have seen Muhoroni Sugar go down onto it’s knees with the poor farmers left to languish in poverty.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email francis@kahawatungu.com

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