High court blocks sale of 5 sugar firms

The High Court Tuesday issued an order to stop the privatisation of five sugar companies for a period of two months following an urgent case contesting the sale.

In his ruling, Justice Weldon Korir has further prohibited the Privatisation Commission from proceeding with the sale of Nzoia, South Nyanza, Chemelil, Muhoroni and Miwani sugar companies until it is properly and legally constituted.

The court said the commission should only proceed with the sale after consultations and participation of all stakeholders is done and thorny issues ironed out.

This ruling comes after Kisumu Senator Anyang’ Nyong’o and Gem MP Jakoyo Midiwo moved to court claiming the sale process was being conducted illegally.

Through their lawyer Victor Obondi, the two ODM legislators say the commission ignored mandatory and material procedure and conditions prescribed for the privatization process of the subject companies, while issues raised by cane farmers had not been addressed.

The two leaders had also sued the commission and the Attorney General as interested parties in the matter.

In May 2015, Kenya approved the sale of the government’s stake in five sugar companies; Nzoia, South Nyanza, Chemelil, Muhoroni and Miwani.

In a statement published in the local dailies, the Privatization Commission announced its plans to sell 51 percent of each of the millers to strategic investors with a track record of managing sugar companies further indicating that the proceeds would fund the rehabilitation and modernisation needs of the sugar companies.

“The five companies are in urgent need of modernization to survive competition from the entry of other sugar producers and an impending end to sugar import limits from the Common Market for Eastern and Southern Africa (COMESA) trade bloc “ read the announcement in part.