Mumias Sugar farmers demand audit over US$27M tax debt 

KENYA -Sugarcane farmers and local leaders in Mumias are calling for a thorough investigation into the financial records of Mumias Sugar Company, currently under receiver manager PVR Rao, following revelations of a Kes 3.5 billion tax debt. 

The farmers also want KCB Bank, which placed Mumias Sugar under receivership in 2019 to recover a Kes 545 million (US$4.2M) debt, to publicly disclose a financial report detailing the company’s management and operations since the takeover. 

Speaking at a news conference in Mumias, former Mumias MP Wycliffe Osundwa, alongside other stakeholders, expressed shock over a recent Tax Appeal Tribunal ruling, which granted the Kenya Revenue Authority (KRA) permission to collect the tax arrears from the struggling sugar miller. 

Osundwa questioned how the company accumulated such a massive debt, given that at the time of the receivership takeover, Mumias Sugar had significant assets, including sugar stocks, ethanol, and standing cane. 

“When taking up operations, there were 700 50kg bags of sugar worth Kes 4.2 million (US$32.5K), 685,000 litres of ethanol valued at Kes 274 million (US$2.12M), and standing cane in the nucleus valued at Kes 170 million (US$1.3M). Where did all these monies go?” he asked. 

The statement further highlighted that various companies had procured ethanol on credit, and payments were made to the receiver manager’s account. 

“The receiver manager operated the ethanol plant from February 2020 to December 2021, producing 2.2 million litres worth Kes 880 million (US$6.8M),” the statement noted. 

Local leader Ralph Wangatia criticized the current Mumias Sugar investor, arguing that they lacked the capacity to operate ethanol, co-generation, and water plants, which could have provided alternative revenue streams. 

Additionally, concerns were raised over asset valuation at the company. On February 3, 2025, Centenary Valuers was deployed to assess Mumias Sugar’s assets, but reports indicate that they were allegedly not provided with a full list of plant machinery, leading to an incomplete valuation report. 

Sugarcane farmer Raphael Welimo further claimed that for over a month, there had been cases of cannibalization of equipment inside the ethanol and co-generation plants, raising alarms over possible asset stripping. 

Sony sugar stakeholders seek government assurance 

Meanwhile, stakeholders in South Nyanza Sugar Company (Sony Sugar) are demanding government clarity on the ownership and leasing terms of community-donated land as the miller prepares for privatization. 

Speaking on behalf of the Awendo community, MP Walter Owino emphasized that local stakeholders need to know whether the government will lease both the factory and the land or if the land will remain under community control. 

“The nuclear land for the company was donated by the people of Awendo. They deserve to know the fate of the land before the leasing process is finalized,” he stated. 

Owino further urged the government to guarantee job security for existing employees before finalizing any leasing agreements.