A bank has introduced a new dimension in a suit where Mumias Sugar is
pursuing Sh1.1 billion, claiming saying it does not have any account in
the name of the miller. PHOTO | FILE
NATION MEDIA GROUP
A bank has introduced a new dimension in a suit where Mumias
Sugar is pursuing Sh1.1 billion, claiming saying it does not have any
account in the name of the miller.
Mumias
Sugar wants Dubai Bank Kenya Ltd compelled to provide details of an
account to pave the way for prosecution of four former bosses in a bid
to recover Sh1,112,935,002.
The sugar firm wants the court to declare that the cash in the account is its asset.
However,
Dubai Bank denies the claims. “There has never been any request by
Mumias Sugar or through any of its officers to have any bank account
opened in the name of Mumias Sugar Company Ltd or any other person.
Consequently, the bank has never had any account in the name of the
miller or any other account meant for its benefit.”
The
bank also denied knowledge of Mumias Sugar’s customers, or any
notifications to dealers, asking them to deposit money into the said
account.
IMPOUNDED SUGAR
Mumias
said suspended managers Peter Kebati (managing director), Chris
Chepkoit (finance director), Emily Otieno (director, legal affairs and
company secretary) and Paul Murgor (commercial director) conspired with
Dubai Bank to open an account without its knowledge.
The
miller said its former bosses had sought permit from the Ministry of
Finance to import about 115,000 bags of sugar to cater for a shortfall
in production. The shortage had been blamed on poor weather.
During
the company’s board of directors meeting, a presentation of the sugar
purchase plan was made by Mr Kebati, Mr Chepkoit and Ms Otieno.
The
board approved the plan to buy 30,000 tonnes of sugar in the open
market as a stop gap measure to ensure steady supply of Mumias’
products.
Without getting an approval
from the miller’s board, however, Mr Kebati and Mr Chepkoit entered
into talks with Dantes Peak Ltd, which was to supply Mumias with 100,000
tonnes of sugar at a price above the market rate.
Mumias
Sugar claimed that it is at this point that Mr Chepkoit instructed
Dubai Bank to open an account in the name of the miller and Dantes Peak.
The
now suspended bosses are said to have informed Mumias customers of a
sugar consignment that was to dock at the Port of Mombasa. Consequently,
the dealers and customers placed orders and deposited money for the
sugar in the Dubai Bank account.
However,
when the first consignment of 10,000 tonnes arrived in March 2013, the
Kenya Revenue Authority impounded it over claims of unpaid tax. But the
sugar firm contested that the product was obtained from Comesa, where no
duty was payable.
However, Dantes
Peak failed to not only prove that the sugar came from Comesa but was
also unable to pay the necessary tax for its release.
FRESH DEALS
Aware
of the situation, the suspended managers organised to have the sugar
released by the taxman without informing the miller’s board of
directors. The former bosses struck two fresh deals behind the board’s
back with Dantes Peak, Dubai Bank and Sudan-based Kenana Sugar Company.
Dubai Bank has refuted these claims stating that it was not party to any subsequent agreements.
The bank said it was Mumias Sugar and Kenana Sugar, which entered into a deal dated October 30, 2013.
According
to court papers, the two firms asked the bank to finance Mumias in
order to meet its obligations and the lender is said to have accepted
the request.
In financing Mumias, the
bank issued a letter of undertaking and guarantee dated November 12,
2013. However, Mumias allegedly failed to honour its side of the
bargain.
The miller has sued Dantes Peak Ltd, Dubai bank and its former managers seeking to recover the money.
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