Investigative Reports By Leo Odera Omolon At Kendu-Bay Town
NEW development has emerged regarding the ownership of two cotton Ginneries one in Homa-Bay and at Kendu-Bay Town, which are currently owned and managed by Asego Holdings Ltd, a business flagship of the former Rangwe MP Eng. Phillip Okoth Okundi
Okundi is the currently the chairman of the Communications Council of Kenya {CCK} a government parastatal body and the Director of Election of the Orange Democratic Movement {ODM}.
The revelation came during a tentative meeting of farmers and stakeholders in Rachuonyo North district held at the Big Five Hotel, Kendu-Bay yesterday. It brought together the District Commissioners for Rachuonyo South and Rachunyo North districts, district agricultural officers, district co-operative officers and the chairman of Rachuonyo district Co-Operative Union Ltd.
The meeting was aimed at valuing the role of cotton crops in the economy of the two districts and plans to resuscitate the production of the same in the region, the need to have cotton ginned locally, the role of the district co-operative union, and their primary farmers co-operative societies.
The leaders at the meeting maintain that this was one of the ways forward in the concerted effort to eradicate poverty Revamping of cotton production, role of union in cotton industry, the value chain consideration of ginning cotton locally and marketing.
During the meeting, a copy of a letter purported to have been written by the Managing Director of the Co-operative Banks Ltd., was circulated to the participants. It was written on February 2009. It states that the bank had written-off its outstanding loans to the former South Nyanza District Co-operative Union Ltd, amounting to a total of Kshs 66 million.
The letter, signed by Mr. Gideon Muriuki, the MD Co-operative Bank reads in part as follows; ”The co-operative movement has remained the backbone of the Kenya economy, noting that the membership has now grew to over 7 million members. One of the key strategic focus of Co-Operative Bank’s board of directors has been the revival of the various dormant societies countrywide, particularly reviewing the modalities of resuscitating the various sectors that grown through difficult times in recent years.”
The letter went on, ” In this regard, one of the key issues considered is the removal of the debt burden and I am pleased to advice you that the board of directors has fully written off all outstanding loans with the bank amounting to Kshs 65,330,946.40.
“We believe debt waiver will be key to the revival of your union and its primary societies. Please do liaise with your bank branch managers for any further details you may require.”
The writing off of the debt owed to the bank by the defunct South Nyanza District Co-Operative Union Ltd, has rekindled the memories of the controversial and hotly contested alleged selling by public auction of the two cotton ginneries, one located at Homa-Bay Town and the other one located at Kendu-Bay.
The two facilities, according to available records, were auctioned on the bank’s instruction in the year 2000. They were bought in what the sources termed as a stage managed auction conducted in Homa-Bay town.
The latest development has now put on the spot the former Rangwe MP Phillip Okundi, whose business flagship Asego Holdings, is said to have bought the two ginneries at the fall of the hammer.
Prior to the alleged auction, Mr. Okundi’s firm had entered into an agreement with the defunct South Nyanza District Co-operative Union Ltd and rented the two facilities with the understanding that instead of paying the Union monthly rent, Asego Holding would offset the bank’s loan on a monthly installments of Kshs 200,000 per month while carrying out ginning activities at the two facilities, while paying the union a small amount of money to the tune of Kshs 20,000 to enable it maintain its office and stationery.
After paying only a few installments to the bank, Mr Okundi’s company stopped remitting further to the bank as has had been agreed with the union, although it continued carrying out ginning at the two facilities. It also stopped paying rent, and this prompted the bank to instruct its lawyer, a Mr.J Abuga, to advert the two ginneries for public auction. And according to record, a firm of suction called Jone Brooks Consultants Ltd was instructed to conduct the auction.
After the advertisement in the local press, three firms and individual made their bids for the properties. These were a Mr Onbyango of PO BOX 43305 Nairobi whose bid was Ksha 17.5 million, m/s Mwanza of BOX3575 of Kisii who made an offer of Kshs 17 million, and TryggHnasa Ltd, which offered Kshs 16 million. It was the bid by this company, the lowest, which bought the two ginneries. It was later discovered that the same firm is closely associated with the Asego Holdings Ltd, which had defaulted in its rent agreement.
This was during the Moi’ KANU regime, and the Union’s protests against the auction were ignored due to the fact that Eng. Okundi was one of the politically correct and Moi’s favorable allies in Luo-Nyanza.
Attempts to regain the control of the two ginneries were thwarted with the help of the Provincial Administration, which violently dispersed any farmers meeting to sensitize their members.
A brand new Isuzu Lorry owned by Rachuonyo Farmers Primary Co-operative Society Ltd, which was found parked outside Kendu-Bay Cotton Ginnery, was also seized by Okundi company. And the company continued ginning at the two facilities.
Although the chain of letters in our position indicated that the auctioneer had issued the new owners with sale certificates, there is no bank document showing that any money had been remitted to the bank, though the certificate indicated that Okundi Company had bought the two ginneries at Kshs 16 million. But the bank letter indicated that it had written off the entire outstanding loan of Kshs 66 million and there are no indications that it had received the Kshs 16 million, the sale price at the alleged auction.
A firm of lawyers, S.J.Nyang’ and Company Advocates, has written to the chairman of Rachuonyo Farmers Co-operative Society Ltd, asking for particular and seeking firm instruction from the farmers society to enable it to institute legal action in court seeking for eviction of Mr. Okundi’s firm from Kendu-Bay Ginnery.
The farmers want plans to pursue the matter through court to retrieve the ginnery and also to ask Okundu’s firm to compensate the Rachuonyo farmer for the loss of revenue and earning from the Ginnery for the last ten years.
The farmers are up beat demanding that Okundi’s firm should be evicted from the ginnery which would go to Farmers Unions as such. But it was the property of the Rachuonyo farmers primary society, which at the time was affiliated to the South Nyanza District Union, which had other primary societies.
The farmers are demanding that Okundi’s company should be evicted out of its property as well as the land it occupied at Kendu Ginnery and all the property attached to the facilities.
The law firm is contemplating pursuing Okundi’s company in court for compensation for the period in which they have been illegally using the assets and facilities of the Rachuonyo Cooperative Society.
A member of the farmers steering committee, Mr. Ezra Odondi Opar, said the Rachuonyo farmers would pursue Mr. Okundi’s firm to the bitter end, with the view to ensure that its illegal occupation of the Kendu Ginnery is terminated, and the facilities reverted to its original owners, the farmers.
Mr Okundi could not be reached for his immediate reaction. A phone made to his cellphone number 0722 511263 went an unanswered.
Ends
Leooderaomolo@yahoo.com