Raila sells Kisumu molasses plant at sh. 7 billion

Raila sells Kisumu molasses plant at sh. 7 billion

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Business magnate Jaswant Rai has now finally acquired the financially crippled Kisumu Molasses Plant which is owned by the Jaramogi Oginga Odinga family, Weekly Citizen can report today.
We have further established that Rai set to acquire the Dominion Farms in Siaya and Miwani Sugar Company. He owns Raiply Mills, Rai Cement and the giant Webuye Paper mills alongside Sukari Industries and West Sugar Company.

Sources intimate that he is set to acquire several other ailing sugar companies. He was seen at the sugar taskforce meetings which Uhuru Kenyatta set up to look into the subsector. It was co-chaired by Kakamega governor Wycliffe Oparanya and Agriculture cabinet secretary Mwangi Kiunjuri.
The taskforce recommended that state-owned sugar firms should be privatised. Raila Odinga who attended the last meeting said the privatisation should be done in a modeled manner. The chairman of the Kenya National Sugar Alliance Saul Busolo and his team adopted a hard stance over the matter.
Molasses Plant has been experiencing problems for close to five years when it ground to a halt. Impeccable sources have revealed that work at the plant is set to start soon. The company started experiencing problems when Mumias Sugar Company, its source of raw materials started going under.
Mumias has for many years been supplying the Otonglo-based firm with molasses until things went awry. Dominion Farms also ground to a halt after leaders became hostile to after it declined to offer them pocket money. A member of the Siaya county assembly Leonard Oriaro waged a sustained onslaught against Calvin Burges who owned the farms forcing him to walk away.
Oriaro had repeatedly raised purported environmental and social concerns allegedly affecting the people of both Bondo and Siaya.

A section of Kisumu molasses plant

The Odinga family acquired the Molasses Plant in 1995 following a public auction using Kisumu Development Trust and was inaugurated in 1997. At the time members of the public contributed money towards its purchase but there has not been any annual general meeting with those who ask for AGM threatened by goons believed to be supportive of Raila.
Former Rarieda MP the late Odeny Ngure was the chairman of the trust which raised millions of shillings towards purchase of shares at the company.
The Kisumu Development Trust is a registered entity with its own articles of association and directors, elected by the registered contributors of the Sh1.8 million that was used to purchase a 5pc stake in the plant. So, of course the shareholders ought to enjoy all rights and privileges commensurate to their respective shares, which would ordinarily include dividends.
The chairman of the trust is John Otega and some of the prominent personalities that have served as directors of the trust include the late Joab Omino and Ngure, who served as MP for Rarienda 1997-2002.
Residents have for a long time been up in arms over land related issues and pollution by the firm.
Kisumu Molasses Plant was a white elephant by 1982 when the government which owned 51pc of the plant, on account of its Sh86.7 million investment, abandoned it as did the major private shareholder, Nitin Madhvani.
By the time of its abandonment the government-private partnership had invested about Sh170 million in the venture to produce ethanol.

Kenya National Sugar Alliance chairman Saul Busolo(Centre)

Treasury estimates in 1982, showed that the plant was making annual average losses of Sh135 million and had debts amounting to Sh625 million. The Moi government pulled the plug on the plant by refusing to guarantee any more loans.
The auction of all movable assets of the plant was advertised on July 10 1995, and the actual sale was to take place on April 15 1996 but it actually took place on June 3 1996.
Raila attended the public auction undertaken by Panama Rovers Auctioneers and made a bid for the plant in its entirety at a price of Sh570 million, which the receiver, Kenya Commercial Bank, accepted. Following the payment of 25pc of the bid price, Sh142.5 million, a controversy arose as the receiver, introduced a new change of terms, implying that the purchase does not confer any land lease or land ownership title to the buyer.