United Millers directors found guilty of Sh79m sugar fraud

Directors of United Millers Limited, Sunil Narshi Shah, Kamal Narshi Punja Shah and Magnesh Kumar Verma, at the Milimani Law Courts on May 10, 2021, over a Sh79.4million sugar deal. 

Photo credit: Richard Munguti | Nation Media Group

Two directors of a Kisumu-based company have been found guilty of conspiracy to defraud a businessman of Sh79.4 million in a sugar deal seven years ago.

City Court Chief Magistrate Roseline Oganyo found Sunil Narshi Shah and Kamal Narshi Punja Shah of United Millers Ltd guilty of conspiring to defraud B N Kotecha & Sons Ltd of Sh79,491,000, by falsely pretending they had lost business through the latter’s failure to supply sugar in April 2015.

Besides Sunil and Kamal, Ms Oganyo also convicted two employees of United -- Magnesh Kumar Verma and Henry Munywoki Kavita, the sales manager – as well as the company itself, for the same offence.

Sunil, Kamal, Verma and Kavita were also found guilty of conspiracy to defeat the course of justice by filing a civil suit at the Kisumu High Court against B N Kotecha & Sons Ltd, Hermal Kishor Kotecha and Hashill Kishore Kotecha, using falsified documents, to lay a claim of compensation to the tune of Sh124 million for loss of business.

The magistrate said the five presented to the High Court in Kisumu forged local purchase orders (LPOs) obtained from Warma General Merchants, Kabui Traders, Huruma Stores, Alysum Stores, Cumulus Services, Githitu Stores, Lincon Stores Ltd, J B Stores and Alkim Mini Price Stores for the supply of sugar and other commodities.

The magistrate further found Sunil, Kamal and United Millers guilty of uttering false documents on October 13, 2015, in the Kisumu High Court case by presenting as evidence the forged LPOs obtained from the traders in Mount Kenya region for the supply of sugar by Kavita.

Kavita was found guilty of forging the LPOs from the traders.

Ms Oganyo said the prosecution, led by State Counsel Everlyn Onunga, proved the case against the accused and said the accused never quantified the loss they incurred through failure by Kotecha to supply the sugar.

Ms Oganyo said the five who conspired to defraud Mr Kotecha on April 2, 2015, did not incur any loss at all since they never supplied the sugar to the traders.

And besides the sugar, the aggrieved traders who testified in court said United did not also supply others goods such as wheat flour, cooking oil and maize flour, which they had ordered from the supplier.

“In as much as UML was entitled to be compensated for the loss of business, it shouldn’t have used forged LPOs to seek profits from B N Kotecha & Sons Ltd,” Ms Oganyo ruled.

The court noted that Sunil, 68, told the court that it was him who sealed the sugar supply deal with Kotecha, whom he loaned Sh212 million to jumpstart the business.

Kotecha supplied sugar worth Sh88 million, leaving a balance of Sh124 million, the subject of the High Court case.

The court said Sunil and Kotecha reached an out-of-court settlement, then agreed on the profits to be paid in addition to his lawyers’ fees.

“A deputy registrar Kisumu High Court who testified before this court confirmed the forged LPOs were presented as evidence in the High Court case,” Ms Oganyo ruled.

“I find that the offences of conspiracy to defraud, forgery and uttering of falsified documents have been proved by the Director of Public Prosecutions through Ms Onunga, who called 14 witnesses,” Ms Oganyo ruled.

She said Kotecha told the court that sugar millers in Western Kenya had stopped crushing cane, thus affecting his capacity to supply the commodity.

He, however, said he refunded all the monies that he had received from United, but was later sued for loss of business.

A state prosecutor, Ms Njeri Gichuhi, urged the court to treat Sunil, Kamal, Verma and Kavita as first offenders. She further asked the court to call for a probation officer’s report about the accused before sentencing.

Defence lawyer Martin Gitonga applied to have the four freed on bond pending sentence.

Ms Oganyo granted the convicts a cash bail of Sh400,000 each and ordered them to return to court for records and sentencing on March 2.



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