Pyrethrum firm and Sacco tussle over Sh1.7 billion debt for 16 years

“We have all the documents and despite the figures, we will still forward the drafted consent to the Solicitor General for the same to be finalised,” she told the court.

In contrast however, Pareto Sacco through its lawyer John Okumu complained of the delay from the office of the Attorney General (AG) which represents pyrethrum. “The AG is yet to sign a consent we shared in March 2021. I will draft another consent,” stated Okumu.

Okumu submitted that the AG was delaying the resolution even after the parties held meetings and agreed on the way forward. “I find myself in a difficult situation. The AG has been slow even when we spoke and agreed,” said Okumu.

He said the AG had been evading negotiations making it difficult to agree. “Whenever we hold negotiations and meetings the AG walks out. We believe that the negotiations have failed,” Okumu said last year.

Okumu said he had lined up three witnesses to testify if the negotiations did not bear fruit.

This reporter perused the file and the case has not proceeded since March 2021. Further the court records show that the case had been mentioned before a judge five times, transferred to the Deputy Registrar of the High Court, and mentioned four times without a breakthrough in the last four years.

Deduct money

Pareto Sacco sued PRA over the Sh1.7 billion debts allegedly accumulated between 2008 and 2015.

Further, the Sacco submitted that it entered an agreement with Pyrethrum Company, to deduct money directly from its employees’ salaries and remit it to Sacco. “The remittance targeted employees registered with the Sacco as members to promote their welfare and economic growth,” the Sacco deposed.

However, it complained that PRA, which took over from the Pyrethrum Board of Kenya, declined to remit the same between 2008 and 2015.

The Sacco claims Sh29.4 million remittances accumulated between 2008 and 2009. Further it seeks Sh1.67 billion in penalties and interest accrued. “PRA has not heeded to several notices for it to effect payments,” read the petition.

According to Pareto, in a letter dated June 15, 2015, the Ministry of Industrialisation and Enterprise Development confirmed that PRA Had Sh1.7 billion debt. “After defaulting on the payment, it attracted a 5 percent compound interest penalty of Sh1.67 billion,” the Sacco averred.

Further, the Sacco adds that PRA admitted to owing the amount and in 2014, paid Sh981, 280, but failed to remit other deductions.

Pareto adds that even the office of the Ombudsman, contacted on August 8, 2015, investigated the case and concluded that PRA owed Sacco the amount in question.

As a result, Pareto deposed that it failed to meet its financial objectives, the debt hindered its engagement in development and investment projects and it was also unable to manage the welfare of its members.

In its petition, Pareto seeks court orders, compelling PRA to pay the debt and the interests accrued. In response, filed as a Preliminary Objection, the government through the AG, wants the case dismissed for lacking merit.

The AG accused Sacco of exaggerating the figures, especially in penalties, as the debt is way below.

Further, AG noted that the case was filed in 2016, six years after the course of action, following the debt crisis. “The case is defective because it was filed out of time. It is null and void and it is a waste of the court’s time and process,” submitted the AG through State Counsel Victor Ondieki.

The case will be heard on March 20.