Sale of State sugar firms on af­ter suit flops

Lead­ers claimed that na­tional gov­ern­ment lacked author­ity to dis­pose of the millers

Daily Nation (Kenya) - - BUSINESS - BY BRIAN WASUNA bwa­suna @ke.na­tionm edi­a­com

Up to 51 per cent stake in the firms in the western sugar belt is up for sale

Five State-owned sugar millers are up for sale again af­ter the High Court dis­missed a pe­ti­tion filed by western Kenya po­lit­i­cal lead­ers to block the trans­ac­tion.

Kisumu gov­er­nor Anyang’ Ny­ong’o, for­mer Gem MP Jakoyo Midiwo, the Coun­cil of Gov­er­nors, Mig­ori and Bun­goma coun­ties had in the pe­ti­tion claimed the na­tional gov­ern­ment has no author­ity to wade into pri­vati­sa­tion of sugar firms be­cause an­i­mal and crop hus­bandry are de­volved func­tions.

Yes­ter­day, Jus­tice Ed­ward Muri­ithi ruled the court in­ter­vene in the stand­off be­tween the Pri­vati­sa­tion Com­mis­sion and the county lead­ers be­fore al­ter­na­tive dis­pute res­o­lu­tion mech­a­nisms are ex­hausted.

That im­plies that the sale process ini­ti­ated ear­lier is on.

The Pri­vati­sa­tion Com­mis­sion had in 2015 kicked off the process of sell­ing ma­jor­ity stakes in Nzoia, South Nyanza, Chemelil, Muhoroni and Mi­wani sugar com­pa­nies. Two of the businesses, Muhoroni and Mi­wani, are in re­ceiver­ship.

The move sparked a war with lead­ers from the sugar belt, who in­sisted that only county gov­ern­ments have the author­ity to de­lib­er­ate on the pri­vati­sa­tion of pub­lic firms in the agri­cul­ture in­dus­try.

Jus­tice Muri­ithi has sug­gested that the dis­pute be re­solved through al­ter­na­tive dis­pute res­o­lu­tion ve­hi­cles such as me­di­a­tion, ne­go­ti­a­tions and ar­bi­tra­tion as pre­scribed by the In­ter­gov­ern­men­tal Act, 2012.

“There is no sug­ges­tion that the struc­tures of al­ter­na­tive dis­pute res­o­lu­tion un­der the In­ter­gov­ern­men­tal Act, 2012 can­not rem­edy the sit­u­a­tion man­i­fested in the dis­pute about whose func­tion be­tween the na­tional and county gov­ern­ments is the busi­ness of milling of sugar,” Jus­tice Muri­ithi ruled.

“Such rea­son­able ef­forts to­wards res­o­lu­tion of the dis­pute have not been ex­hausted or failed. The court can­not, there­fore, be asked to re­solve the dis­pute any­how now that the mat­ter is be­fore court. That would be usurp­ing the prior ju­ris­dic­tion of the or­gans of In­ter­gov­ern­men­tal Re­la­tions Act,” he added.

Jus­tice Muri­ithi’s de­ci­sion has lifted a court or­der ear­lier is­sued in 2015 that barred the Pri­vati­sa­tion Com­mis­sion from com­plet­ing the dis­puted process.

The com­mis­sion had an­nounced plans to sell a 51 per cent stake in each of the five sugar com­pa­nies to rep­utable strate­gic part­ners through a bid­ding process.

It added that an­other 24 per cent stake in each of the firms would be sold to out­grow­ers and em­ploy­ees.

Un­der the plan, the gov­ern­ment will re­tain a 25 per cent stake in each of the millers but with an op­tion of sell­ing its share in fu­ture.

Par­lia­ment ap­proved the pri­vati­sa­tion plan in April 2015.

There’s no sug­ges­tion that struc­ture of al­ter­na­tive dis­pute res­o­lu­tion ...can­not rem­edy the sit­u­a­tion” Jus­tice Ed­ward Muri­ithi

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