In Summary
  • The report by consulting firm KPMG seen by the Nation also reveals gross abuse of procedure by the managers who have since been sacked
  • It details how the trio’s abuse of protocol resulted in the company taking financial responsibility for a third party’s failure to honour a sugar importation deal
  • Dantes Peak did the importation after obtaining a letter of credit from Dubai Bank, but upon the cargo landing in Mombasa, the company failed to clear and pay port charges

Mumias Sugar Company’s senior managers misrepresented key facts to its board in an importation deal that cost the miller Sh1.1 billion in losses, a forensic audit shows.

The report by consulting firm KPMG seen by the Nation also reveals gross abuse of procedure by the managers who have since been sacked.

The company’s former chief executive officer, Mr Peter Kebati, commercial director Paul Murgor and company secretary Emily Otieno are among the senior executives who were shown the door.

The audit report details how the trio’s abuse of protocol resulted in the company taking financial responsibility for a third party’s failure to honour a sugar importation deal.

“It is clear that Emily Otieno and Peter Kebati persuaded Paul Murgor to alter the information that was presented to the board, resulting in their being misinformed about the importation,” KPMG said in the report.

At the centre of the loss is Dantes Peak Limited, a company that had been contracted to import sugar from Kenana Sugar Company in Sudan on behalf of Mumias in mid last year.

Dantes Peak did the importation after obtaining a letter of credit from Dubai Bank, but upon the cargo landing in Mombasa, the company failed to clear and pay port charges.

Mumias Sugar was forced to step in and pay the Kenya Ports Authority freight charges, Dubai Bank and Kenya Revenue Authority, which had seized the consignment.

The business development manager at the sugar miller, Mr Peter Hongo, told KPMG that the move was informed by the fact that Dantes Peak had brought in  the consignment on the strength of a sugar importation licence granted to Mumias.

“As the importation licence had been issued to MSC, it was becoming a reputational risk to take up the responsibilities pertaining to the sugar,” he said.