The National Treasury has intervened to stop the planned auction of land belonging to South Nyanza Sugar Company Limited (Sony Sugar) over an outstanding debt of Ksh862.3 million owed to Co-operative Bank of Kenya.
In a statement on Tuesday, August 18, Awendo MP Walter Owino said the government had taken action following public concern over the 40-day auction notice issued by the bank.
"Following public concern surrounding the 40-day ultimatum auction of Sony Sugar land assets by Co-operative Bank of Kenya over outstanding liabilities, concrete government action has been taken to safeguard the company’s assets and protect the livelihoods dependent on the miller," he wrote.
Owino said the debt owed to Co-operative Bank had already been recognised as a public pending bill during the government’s restructuring process for the leasing of state-owned sugar millers.
"The loan facility acquired by Sony Sugar Company from Co-operative Bank was formally captured as a public pending bill during the regulatory restructuring for the leasing of state-owned sugar millers," he added.
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Owino said he had engaged Treasury Cabinet Secretary John Mbadi over the matter, resulting in an undertaking by the ministry to fast-track settlement of the bank facility.
"Following direct engagement with the Cabinet Secretary for the National Treasury and Economic Planning, Hon. John Mbadi, the Ministry has undertaken to expedite an agreement to settle the Co-operative Bank facility in full. This action effectively resolves the debt dispute and halts any forced auction of public mill property," he further said.
According to Owino, the intervention will also cover outstanding arrears owed to farmers and employees of the sugar mill.
"Beyond resolving the institutional debt, the National Treasury’s intervention incorporates the clearance of long-outstanding arrears owed to sugarcane farmers and factory staff, ensuring equitable relief across the local sugar value chain," he stated.
Owino said further details on when the payments would be made would be issued by the company's management in due course.
"Further operational timelines regarding the disbursement of payments to farmers and staff will be communicated through official management channels in due course," he concluded.
The intervention follows a formal notice from Co-operative Bank warning Sony Sugar that it would exercise its statutory power of sale over a parcel of land registered in the company's name.
In the letter addressed to the Sony Sugar CEO, the bank said the company had failed to rectify the default despite an earlier notice and confirmed the amount outstanding as of July 14, 2026.
"As you are fully aware and despite the notice mentioned above, you have not rectified the default, and you owe the Bank the sum of Ksh862,328,980.41 as of 14th July 2026 in respect of a facility granted to South Nyanza Sugar Company Limited," the letter read.
The bank identified the property targeted for sale as L.R. No. 16339/1, registered in the name of South Nyanza Sugar Company Limited, and gave the company 40 days from service of the notice to clear the outstanding amount.
"Take notice that the Bank intends to exercise its statutory power of sale over Property L.R NO. 16339/1 registered in the name of South Nyanza Sugar Company Limited after expiry of forty (40) days from the date of service of this Notice upon yourself unless you rectify the default and all the outstanding balances owed to the Bank are fully settled within the aforesaid period," the letter added.
Co-operative Bank further cautioned that any repayment arrangement or payments made after the notice would not affect its right to proceed with the sale of the secured property.
"Please note that any repayment arrangements entered into between yourselves and the Bank and/or any payments made by you after the date of this notice shall be accepted by the Bank strictly on account and without prejudice to the Bank's right to proceed and realize its securities as aforesaid," the letter further read.
