The High Court in Vihiga has given the Sarrai Group a green light to continue with operations at Mumias Sugar Company after hitches following a recent takeover.
The Court issued the orders on Tuesday following a case filed by the Kakamega County Government challenging the suspension of the takeover by the Ugandan firm.
Justice W. Musyoka certified the case as urgent further restraining Tumaz & Tumaz Enterprises Limited and receiver manager Ponangipalli Venkata Ramana Rao from interfering or terminating the lease contract between the sugar firm and Sarrai Group pending disposal of the motion or further orders by the court.
“That, pending disposal of the Motion or either or further orders of the court, interim conservatory order in rem, is hereby issued restraining the 1st and 2nd Respondents jointly and severally, their agents, or any person acting under their behest or any other person, from terminating, interfering, altering the lease contract between Mumias Sugar Company Limited (in Receivership) and the interested party herein or in any other way stopping their operations, repair and any other activities of the said company by the interested party under the lease contract,” the order reads.
Tumaz & Tumaz Enterprises Limited and Ponangipalli Venkata Ramana Rao are listed as respondents in the case. The Sarrai Group is the interested party.
Further directions on the matter will be issued on January 25, 2022.
Kahawa Tungu understands that the Sarrai Group has been on the ground since December 24, 2021 undertaking different activities at the firm, including a number of meetings with management.
The company has pledged to revive the ailing miller amid protests from Tumaz & Tumaz, a firm owned by Butere-based investor Julius Mwale.
On December 30, the court blocked the receiver-manager from effecting the lease agreement with Sarrai Group until a case by Tumaz & Tumaz is determined.
Tumaz & Tumaz had protested the move by the receiver manager to award the tender, arguing evaluations on technical capacity should have been done by a third party.
The company alongside Kruman-Finances had placed the highest financial bids for the lease contract.
In their complaints, the two firms argued that Sarrai Group was the least qualified on grounds that it was not the highest bidder.
Kenya Commercial Bank (KCB) placed struggling Mumias Sugar Company under receivership in September 2019 over a long-term debt.