Jaswant Rai withdraws case against Mumias

West Kenya Sugar Company chairman Jaswant Rai when he appeared before the National Assembly's Committee on Implementation at Harambee Sacco Plaza in Nairobi in 2018. [File, Standard]

West Kenya Sugar Company chairman Jaswant Rai has withdrawn from the case challenging the leasing of Mumias Sugar Company.

The tycoon, through his company West Kenya, had challenged his brother Sarbjit Singh Rai's plan to manage the collapsed Mumias Sugar in a 20-year lease.

Rai's lawyer Muthomi Gitonga, on Thursday, August 31, 2023, wrote to both the Court of Appeal and Commercial Court at Milimani indicating that the billionaire has withdrawn his claim in the case.

West Kenya Sugar Company also withdrew from two cases pitting Kenya Commercial Bank (KCB), receiver manager Ramana Rao, and Sarrai Group on one end, against creditors including Kimeto and Associates Advocates.

Rai has also withdrawn a case he had filed against the Directorate of Criminal Investigations, the Attorney General, the Inspector General of Police and the Immigration Department following his arrest by detectives at the Jomo Kenyatta International Airport on July 15, 2023.

"Take notice that West Kenya Sugar Company Limited and Jaswant Singh Rai, the 1st and 2nd interested parties/applicants herein, hereby wholly discontinue and withdraw their claim in this suit," reads the notice by Rai and West Kenya lawyer Gitonga.

However, Rai and West Sugar did not state reasons for withdrawal in their notices.

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They now become the second and third parties to withdraw their cases against Mumias, this coming just a day after Vartox Resources Inc., based in Dubai, withdrew a case where it had challenged a 20-year lease awarded to Uganda-based Sarrai Group to manage Mumias Sugar Company.

Vartox's application will be brought before the court when judges resume after their August recess.

The firm withdrew its opposition to an appeal filed by Sarrai Group, KCB and Ramana Rao at the Court of Appeal.

"Take notice that Vartox Resources Inc, the third respondent in these proceedings, hereby wholly withdraws its application dated December 25, 2022," the notice filed by Vartox's lawyers, Anjarwalla and Khanna LLP, read in part.

This development comes days after President William Ruto, who spoke in Mumias during his five-day tour of the Western region, directed parties involved in the fight for control of Mumias to withdraw their cases in court.

Vartox took over a $35 million loan that had been given to the miller by Proparco a French government lending firm.

Vartox was also challenging the 20-year lease handed to Uganda-based Sarri Group, owned by Rai's brother Sarbjit Singh Rai.

Its involvement in the case was central to an investigation by the DCI of the Victoria Commercial Bank (VCB).

In their application in court, DCI sought to investigate Vartox's shillings and dollars accounts over conspiracy to defraud, money laundering and fraud in relation to tax.

It was also the reason the DCI initially picked Jaswant Rai at JKIA for questioning.

Inspector Isaac Ogutu, from the DCI, said in the application that preliminary investigations had shown that unnamed people had conspired to defraud Mumias Sugar Company with the aim of sabotaging its revival and operation.

The main entrance to the collapsed Mumias Sugar Company. [File, Standard]

He also alleged that the transactions could be fictitious and that there was a possibility that they never took place in actual books of accounts of the bank.

On June 23, the DCI got orders allowing them to investigate the said accounts, from January 2, 2019, to date.

VCB's chief executive Yogesh Pattni moved to the Commercial Court arguing the DCI was conducting a sham probe since the accounts, they listed to be of interest in the probe, do not belong to Vartox.

Pattni said in his affidavit that he had appeared before DCI investigators on June 21 for questioning but they did not give any evidence to back up their claims.

"The application did not provide any specific details on how the applicants were alleged to have defrauded Mumias," said Pattni.

"The allegation that there was a fraudulent assignment of Mumias debt from Proparco to the 2nd applicant (VCB) is an absurdity."

Vartox's appointed signatory Amal Kokkandathil Joseph in his affidavit filed at the same court confirmed the same.

"From the contents of the application and the order, the bank account numbers cited by the DCI do not belong to the 1st applicant (Vartox Resources Inc)," he said.