The government has suspended Bungoma’s Nzoia Sugar Company MD Wanjala Makokha for three months over corruption allegations.
The suspension was announced by Lawrence Omuhaka, the CAS for Agriculture who revealed that the decision was arrived at by the state in a bid to restructure the company.
Makokha has been replaced by Chrispinus Omondi who is in the acting capacity.
“Makokha has failed in his duties and the minister saw it good o restructure the firm through suspending the MD. Already, a team of investigators are on the ground probing the alleged corruption issues,” said the CAS.
Reports by Weekly Citizen indicate that during Makokha’s tenure, farmers have not been paid for over 9 months.
The debts reportedly amount to over Sh700 million despite the company processing sugar worth Sh30 million on a daily basis.
Further reports indicate that workers have not been paid with arrears amounting to over Sh2 billion hence a slack on his part.
Also, Makokha is accused of neglecting company machines that have not been serviced for close to six years hence sugar processed does not meet the set standards in the market.
Makokha is also said to have awarded tenders worth millions to his cronies without following due procurement procedures. For instance, he is said to have awarded a contract worth 200 million for a biometric machine to his close allies.
Furthermore, Makokha is said to have diverted company funds for individual use, a move that was detrimental to the company as it has incurred millions of debts.
In a different account of events last week, cash strapped Mumias Sugar sent packing all its employees, a month after being placed under receivership.
In a statement by Ponangipalli Rao, the receiver appointed by KCB Bank, the sugar milling company will henceforth hire on temporary basis but will give priority to past employees.
“Consequent to the company being placed in receivership, all employees contracts stand terminated from the date of receivership i.e 20th September 2019,” the statement read in part.
In September, the troubled miller was placed under receivership by KCB which controls 1.72 percent shares, in a bid to protect its assets and to the best extent maintain its operations.
Mumias Sugar is partly owned by the government which has over the years tried to bail out the struggling company with fail, with a 20 percent stake and 10 other companies. Individual shareholders hold the majority shares at 71.35 percent.
The insolvent company last released its financial results in 2017 for the year ending June 2016, recording a net loss of Sh4.73 billion and revenue of Sh6.29 billion.
Last year Ecobank Kenya, KCB and Commercial Bank of Africa demanded payments of loans amounting to Sh1.7 billion, Sh480.1 million and Sh364.5 million loans respectively.