A month after being placed under receivership, Mumias Sugar Company has sent home all its employees
Ponangipalli Rao, the receiver appointed by Kenya Commercial Bank (KCB), indicated the cash-strapped sugar miller will hence force hire staff on a temporary basis.
“Consequent to the company being placed in receivership, all employees contracts stand terminated from the date of receivership i.e 20th September 2019,” Rao said in a statement.
Rao further noted that the company will duly compensate all the persons affected by the layoff.
“Any payment to the affected employees shall be dealt with in accordance with the provision of the law. Accordingly, the Receiver shall engage the services of any employee on a temporary basis on mutually agreeable terms until the time when the operations resume.”
“Priority will, however, be given to the past employees while recruiting the staff on a temporary basis until the time when the company’s operations are revived,” the statement stated.
KCB took over the company’s operations on September 20th following the execution of a lender’s agreement deed.
Individual shareholders hold the majority stake at 71.35 percent followed by the government (20 percent) and 10 percent by other companies.
The debt-ridden company last released its financial results in 2017 for the year ending June 2016, posting a net loss of Sh4.73 billion.
The layoff affects 732 employees comprising 433 permanent staff and 319 contracted workers, according to the company’s disclosure dated September 30th, 2019.