Uganda’s Sarrai Group Resumes Operations in Mumias After Court Clearance

Uganda-based Sarrai Group has been cleared to resume operations at Mumias Sugar Company after the Court of Appeal temporarily suspended a High Court decision to kick the firm out of running the troubled miller.

The appellate court said in a ruling that they were persuaded that the Sarrai Group, together with KCB-appointed administrator PVR Rao, had demonstrated that their appeal will be rendered useless if the decision cancelling the lease in July is not suspended.

High Court Judge Alfred Mabeya had cancelled the 20 year lease granted to Sarrai and appointed Kereto Marima as the administrator, pending a process to pick a new company to lease the Mumias plant. The miller was placed under receivership by KCB Group in 2019 over mounting debts.

KCB argued that its rights as secured creditors will diminish if Mr Marima’s actions pursuant to his appointment do not prevail.

In the intended appeal, KCB and Sarrai argue that the trial court erred in undermining its interest as a secured creditor by holding that public interest surpasses the interests of the creditors.

The lender said Mr Marima will continue with the process of administration, including taking over the assets that had been charged to secure Mumias’ indebtedness to KCB and deal with the assets in whichever manner he deems fit to its detriment.

KCB Group further said there was no guarantee that it will be able to recover its securities should the intended appeal succeed.