Anguish for Mumias Sugar as court issues auction order

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The monetary problems facing Mumias Sugar Company are far from over after auctioneers stormed the firm to demand Sh13.4 million owed to a former employee.

The ex- employee, Ms. Pamela Lutta who worked in the company as the Director of Marketing and Corporate Affairs in 2014 before her dismissal in 2015 sued the company for wrongful termination and a Kisumu based court awarded her compensation.

The court had first issued the order on January 22 this year when the auctioneers were given approval to commandeer and sell the company assets to recover the money owed to Ms. Lutta.

However, the then Mumias OCS William Oyugi, failed to implement the directive having deemed its legitimacy as questionable.

Subsequently, Maywood Auctioneers on August 23, 2018, presented the miller with a list of 9 automobiles they wanted to repossess which included that of the CEO. They estimated the nine vehicles to be worth Sh3.1 million.

Top brass members of the company’s management however shot down the estimate which they believed to be much lower than what the cars were really worth.

The management will be in a state of panic should the auction take place since it is almost certain more creditors will demand their overdue arrears.

In a statement made to members of the press on Thursday, acting CEO Patrick Chebos confirmed the incident and termed it unfortunate.

“It is unfortunate that the company has reached a point where creditors want property auctioned to get their money,” said the CEO

The CEO further insisted that the company will clear up all debts once it gets back to milling sugar again.

The firm was supposed to restart milling last week but the idea was shelved after cane transporters demanded overdue pay. The development is set to deepen the firm’s financial woes even further.

The miller currently owes over Sh1 billion in unpaid tax to the Kenya Revenue Authority, Sh700 million in overdue pay to cane growers and millions more to the Kenya Power and Lighting Company and other creditors with an overall Sh20 billion amount in debt.

Cane farmers and activists have however joined the company in protesting against the auction.

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