Mumias Sugar Company Receiver Manager PVR Rao acknowledged having past association with Devki Steels Limited he appeared before the Senate Committee on Agriculture.
Rao had been invited by the Embu Senator Njeru Ndwiga-led committee to shed light on the status of the miller privatization plans. He was specifically required to come clear on widespread reports to the effect that an investor had already been identified to take up the operations of Mumias Sugar Company.
It was while responding to this question that Rao admitted that he had past dealings with Devki, a company hugely reported to have secured a bid to get the then giant sugar miller back on its feet.
“There was a time I was the receiver-manager at Kwale Sugar, I sold scrap metal to Devki, but it was just that. There was no commercial dealing,” Rao told the Committee
His links to Devki became a matter of great interest to the lawmakers amid suspicion that this might have informed the failure to publicly advertise the leasing process.
Questions had also been raised as to how the receiver-manager had already engaged seven other interested parties without the full knowledge of the public.
As a result, the Senate directed Rao to advertise bidding for the leasing bid within two weeks so as to ensure transparency and public participation.
DEVKI Steel Mills Ltd, owned by business tycoon Naredra Raval, has since announced withdrawal from the bidding process citing public interest, but Raval promised to make another bid should the exercise reopen in future.
“We have found it worthwhile to take out our application. We will however express interest, should the exercise be conducted in consultation with all the stakeholders,” Raval said in a statement.
According to the committee, it is failure to advertise the process openly that created room for Devki to declare that it was on the forefront to take over operations at the Kakamega-based miller.
A section of leaders from the Sugar Belt led by Kakamega Senator Cleophas Malalah welcomed the directive to re-advertise bidding for Mumias Sugar Company’s possible takeover.
Malalah says the pronouncement vindicates him and other leaders who had been accused of interfering with plans to privatize Mumias Sugar Company.
“We acted in good faith and now it is clear, no investor had won the leasing bid.” The outspoken Senator charged
Devki Group had allegedly entered a Ksh 5 billion private deal with the miller before pulling out.
The loss-making miller was placed under receivership by KCB Group in September 2019.