West Kenya Sugar Company in trouble again. A 260 Million debate!

Jaswant Rai

Rai’s sugar firm is in trouble as West Kenya Sugar Company was summoned to appear before a parliamentary committee over allegations that it has defaulted on a Sh 260.8 million loan advanced by the Commodities Fund.

“West Kenya should appear before this committee to explain why they have refused to pay government money,”said committee chairman Murungi Kathuri who is also South Imenti MP.

The agricultural financier told the National Assembly’s Special Funds Accounts Committee that West Kenya Sugar Company, associated with billionaire businessman Jaswant Rai, had been uncooperative and dodgy when asked to service the loan.

Sugarcane being delivered at the West Kenya Sugar factory.

The loan balance includes legal fees of Sh 2.4 million that has been in dispute.

The commodity fund is worried they wont have money to lend because of scrapped levies

Commodity Fund Managing Trustee Nancy Cheruiyot said the legal fees that is in dispute was incurred by the former Kenya Sugar Board on behalf of West Kenya in 1997.

West Kenya applied for a loan of Sh 60 million but was advanced Sh 40 million. The legal fee was incurred towards the security documentation for the approved loan.

“Their account was debited with the cost of the transaction but the company has disputed the cost as too high in their view,” said Ms Cheruiyot.

She told MPs the agency — mandated to provide credit to the sugar mills to ensure they remain afloat — is struggling financially due to historical loans.

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Nancy Cheruiyot

“Currently we do not have any money to lend because the levies that were there were scrapped. We currently rely on loan repayments to be able to disburse,”said Ms Cheruiyot.

She added the agency was yet to get support from the exchequer, including its Sh 2 billion request made for the current financial year.

In a press statement after the allegations linking the miller to importation of suspect contraband sugar in the month of June, West Kenya Sugar Company Limited defended itself by assuring the public that sugar produced by the miller was safe for use contrary to reports in the media and social media platforms.

The miller blamed unscrupulous traders and counterfeiters of importing contraband products and repackaging them using the miller’s branded name mentioning it is a leading sugar processing firm based in Kakamega County.

Image result for Images of West Kenya Sugar Company

They produce the popular Kabras Premium White Sugar and Kabras Brown Sugar. Have also invested heavily in an ultra-modern, sugar processing plant located in Kakamega County and take great pride in growing their market share by producing exceptional sugar.

Over 60,000 small-scale sugar cane farmers are contracted by West Kenya Sugar Company Ltd to supply the factory with local sugar cane. The Company continuously invests in its contracted farmers and has invested over KSH 400 Million in the last 18 months in cane development.

The Factory employs 3,500 staff members and supports the local community through scholarship funds, medical outreach programmes, building of a maternity hospital, building primary schools, and various other Corporate Social Responsibility activities.

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They pride themselves in paying their farmers 7 days from delivery and have had no arrears to farmers since inception in 1981.Ironically after their statement they are currently in a loan saga

Auditor-General Edward Ouko has flagged an outstanding loan balances of Sh 8.4 billion at the Commodity Fund, expressing concern that chances of recovering the money are slim.

Mr Ouko said no evidence had been provided for verification showing actions being taken to ensure recovery of the outstanding loans and incurred interest.

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