KENYA – The Transition Authority (TA) has dropped a case where it was seeking to stop the sale of five State-owned sugar firms after Parliament declined to extend its term beyond Friday (March 4).
The authority’s lawyer, Steve Mogaka, said the expiry of the TA’s three-year constitutional term had made it untenable to participate in the court case.
This will effectively kick-start the sale of the struggling millers after it was derailed when TA blocked the process through a court order, saying the Privatisation Commission overlooked the agency’s input in the plan to dispose of the millers.
“Take notice that the suit herein by Ex-parte applicant Transitional Authority is hereby wholly withdrawn for all purposes,” reads a notice from Musyoki Mogaka and Co advocates—representing the TA.
The TA was established to oversee devolution of functions to the counties. It had asked MPs to extend its term by one year.
The government in early December invited investors keen on buying a 51 per cent stake in Sony, Chemelil, Nzoia, Muhoroni and Miwani milling companies to bid. The sale was expected to be concluded by mid this year.
Justice George Odunga had temporarily stopped the sale pending determination of the TA suit.
In the suit, the TA argued that the Privatisation Commission was in breach of section 35 of the Transition Authority Act which states that government assets and liabilities should not be transferred during the transition period without the approval of the authority.
The Privatisation Commission, which is guiding the sale, argued the office of the Attorney-General exempted it from Article 35 of the TA Act.
The commission said it is not selling assets but new shares to strategic investors.
The legal hitch looked set to complicate further the sale given that county governments where the sugar factories are based have opposed the distribution of the millers’ shares.
Twenty four per cent ownership of the mills will be reserved for farmers and employees.