KENYA – Mumias Sugar has moved to court to recover Sh1.1 billion from former chief executive Peter Kebati, finance director Chris Chepkoit, legal affairs and company secretary Emily Otieno and commercial director Paul Murgor.
The four allegedly opened and operated an account in Dubai Bank with two separate sugar importing companies without the miller’s knowledge.
Mumias alleges in court papers that the four secretly came up with a sugar purchase plan to cater for the miller’s production shortfall and presented it to the board of directors for approval yet they are the ones who may have benefited instead of the company.
The firm now wants details of the said account disclosed so that prosecution of the four could be instigated in a bid to recover Sh1.1 billion.
“We are seeking to have details of the account revealed to enable prosecution of claims against the sued parties because opening a bank account without the board’s resolution was an act of fraud against the company yet the monies received in the agreement is not under our control,” says Mumias managing director Coutts Otolo in court filings.
In the suit documents filed at the High Court on Tuesday, the firm alleged that the 30,000 metric tonnes of sugar was to be purchased in the open market as a stop-gap measure to ensure supply of the company’s products.
The firm also alleges that the sugar was meant to be obtained from the Common Market for Eastern and Southern Africa bloc where no duty was payable.
The miller claims that the four, in their well thought out plan, first sought authorisation from the Treasury to import 115,000 bags of sugar with the excuse that there was a production shortfall caused by external factors.
They then allegedly presented the plan to the board of directors and before it could issue its approval, the four allegedly entered into talks with a firm known as Dantes Peak Limited to supply Mumias with 100,000 metric tonnes at a price above the current market.
February 4, 2015; http://www.businessdailyafrica.com/Corporate-News/Mumias-sues-Kebati-in-bid-to-recover-Sh1-1bn/-/539550/2612070/-/cvxo07z/-/index.html