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Transmara Sugar Company Limited (TSCL) has said it is considering shutting down the factory and leaving Kenya.
This is according to an anonymous letter addressed to Agriculture CS Mithika Linturi, DP Rigathi Gachagua, Chief of Staff Felix Koskei and DPP Nordin Haji.
The letter said senior government officials have insisted on being given shs 15 million in order to release a shs 289 million loan the firm applied from the Commodities Fund, a credit advancing agency within the Ministry of Agriculture and Livestock Development.
TSCL applied for a loan of kshs 289 million in the year 2021 with an intention of using the proceeds to establish sugar cane and maintain sugarcane ratoon.
TSCL said its application was duly processed and eventually approved by the Commodities Fund Board of Trustees, and subsequently forwarded to the Ministry of Agriculture for concurrence prior to disbursement.
Since then, its management team has visited Commodities Fund offices countless times to follow up on the disbursements, but in vain.
Towards end of August 2022, TSCL was informed by the management of Commodities Fund that the Minister for Agriculture had consented to the approval of the loan application and the subsequent proposal for disbursement and thus anytime, the fund would be availed to TSCL.
Upon following with the management of Commodities Fund and even visiting the Fund’s premises for a couple of weeks, representatives of TSCL management were notified that TSCL was required to cede 5% of the loan amount, approximated at kshs 15 million to the management of Commodities Fund, prior to disbursement.
This communication was relayed to the board of directors for deliberation, and the board’s final decision was that this demand was against the company policy since it was not envisaged at the application or any other stages in the processing of the loan.
“When we sought clarification from the Commodities Fund Managing Trustee, Ms. Jane Kahithe Ndung’u, she confirmed that this was the true position and that as soon as they received the shs 15million, the full loan amount will be immediately disbursed to Transmara Sugar Company Limited without any further delay,” the letter reads.
The Chairperson of the Commodities Fund Board of Trustee, Mr. Danson Ngaari Mwangi, also reaffirmed the Managing Trustee’s position.
The Chairman further clarified that the then Cabinet Secretary for Agriculture, Mr. Peter Munya, had given the requirement to Commodities Fund, and the kshs 15 million was part of the finances that the government required to fund the presidential campaign- which was underway then.
Having no alternative, Transmara Sugar Company Limited resolved to shelf the plan for the credit facility until further notice.
When the Commodities Fund Management later visited Transmara Sugar Company Limited on December 2022, the Fund’s Managing Trustee still insisted on having the kshs 15million from TSCL in order to promptly disburse the loan.
To date, the loan has not been disbursed.
“On 14th January, 2023, the Managing Trustee called one of our senior officers seeking to establish if TSCL board had reconsidered their position in regards to the kshs 15million, further indicating that she was giving TSCL the last chance if they still wanted to have their loan disbursed, otherwise the loans application and approval would be cancelled and the entire process nullified, necessitating fresh application for the loan under the current Financial Year 2022/2023,” the letter reads.
TSCL said this demands by the Ministry of Agriculture and the Commodities Fund to have farmer’s/loan applicants cede a percentage of their approved loan amount has affected not just Transmara Sugar Company Limited.
They said it has affected a handful of other investors who have had to shelf and even abandon a number of their agricultural projects.
Infact, it amounts to investor frustration, stifles agricultural productivity and borders on economic sabotage.
TSCL said it boasts of good credit rating and promptly pays all taxes due to the Government of Kenya, and thus it does not see any reason as to why a few state officials would want to hold them hostage by demanding for bribes in order to do what is within their mandate and the law.
Transmara Sugar Company is a private limited company located in Kilgoris, Narok County.
The Company has been dealing in large-scale sugar production since 2012, financing its operations and projects mostly from credit facilities advanced by the government of Kenya through the various responsible agencies.
Over the last couple of years, it has had a good relationship with its financiers.
“It is therefore our humble appeal that the leadership of the Ministry of Agriculture and Livestock Development and indeed the leadership of the Nation of Kenya addresses this concern with a view to reverse this trend and eliminate the bad culture in order to make it sustainable for Transmara Sugar Company Limited and others to invest in any viable ventures in Kenya,” the letter reads.