The Rai Family- Kenya’s Untouchable Business Moghuls

It was from its Eldoret base that the Rai Moghuls secured close ties with the late President Daniel Arap Moi, and the late powerful cabinet minister Nicholas Biwot and virtually every power broker at the helm during his reign and thereafter

PART TWO

By The Weekly Vision Investigations Desk

Queries are erupting whether the powerful and dreaded business Moghuls of the Rai Group family are going to pay for their rights, sins and wrongs at long last. Whether they are going to be held responsible and accountable for their deeds in western Kenya?

The Rai Group’s rise to power as business Moghuls with powerful political connections came from the Eldoret based multi-billion shillings Rai Plywoods timber Company, a company that ruthlessly and systematically whittled down the multi-billion shillings Pan-Paper Mills based in Webuye Town of Bungoma County to collapse.

Read Part One here https://theweeklyvision.net/2021/08/13/how-rai-groups-stranglehold-on-imported-sugar-led-to-the-collapsed-local-millers/

The Pan-Paper Mills a World Bank-supported project was the largest in East and Central Africa – a paper manufacturing plant from pulped trees and a major competitor for Rai Ply whose core business was the timber of course from trees – therefore stiff competition for a scarce raw material is less than 100 kilometres apart in Webuye and Eldoret.

It must not be forgotten that after buying Pan Paper, perhaps as a show of the family’s continuing political might, President Uhuru Kenyatta and his Deputy William Ruto a neighbour to Eldoret and Webuye towns were the official guests to preside over its re-opening only for the factory to close down less than 24 hours later

The Rai family recently bought Pan Paper for a song at only Kshs. 900 million when it’s worth is estimated to have been Kshs. 18 billion with accumulated debts of Kshs. 10 billion that had brought its operations on to its knees – Pan Paper was placed under receivership in 2009.

It must not be forgotten that after buying Pan Paper, perhaps as a show of the family’s continuing political might, President Uhuru Kenyatta and his Deputy William Ruto a neighbour to Eldoret and Webuye towns were the official guests to preside over its re-opening only for the factory to close down less than 24 hours later.

It was from its Eldoret base that the Rai Moghuls secured close ties with the late President Daniel Arap Moi, and the late powerful cabinet minister Nicholas Biwot and virtually every power broker at the helm during his reign and thereafter. That meant securing highly lucrative business deals with assured government protection to amass massive wealth and influence.

Somehow the Moghuls were able to successfully navigate through the two terms of the retired President Mwai Kibaki into the current President Uhuru Kenyatta’s first and second terms as some of the most powerful “untouchables” in the country pulling strings at high places in virtually every government office.

It was from this background that they eventually ventured into the sugar manufacturing industry when they bought the West Kenya Sugar factory in the Kabras area of Kakamega County in Western Kenya from the family of the late previous owner Biku Patel’s family.

With that purchase doom appears to have been spelt for the ailing giant Mumias Sugar Company, the immediate neighbour in Kabras area of Kakamega County, Butali Sugar Company, Bungoma’s Nzoia Sugar Company and the worst of all, Busia County that for the first time since independence was about to be graced with sugar or any factory known as Busia Sugar Industries (BSI) at Nasewa area, Matayos sub-county.


The family bought Pan Paper, perhaps as a show of the family’s continuing political might, President Uhuru Kenyatta and his Deputy William Ruto were the official guests to preside over its re-opening only for the factory to close down less than 24 hours later

That was the beginning of the worst phenomenon that the sugar industry in the country had never experienced since it was first introduced in the colonial days in the 1940s – the emergence of the sugarcane poaching crisis that has virtually brought the sugar industry in Western Kenya to a standstill, farming crippled, giants like Mumias Sugar ground to a halt and worse with lives lost to boot.

What has emerged is the fact that whittle down the competitors systematically and ruthlessly executed to bring them to a total still like Webuye’s Pan Paper Mills then break in to buy the beleaguered companies at throwaway prices – once in control dictate to the farmers who are the suppliers of the raw material that is the only cash crop and economic backbone of the region.

The Rai Group’s deliberately executed overt and covert economic subversive or sabotage operations against these entities as they muscled to gain control have in the recent years had been widely reported but ignored not only by the regional but also by the national and international media outlets – they are yet to rest since the government has done nothing to bring an end to the most critical factor of the continuing wars that is to end cane poaching.

A prominent local daily reported: “The Rai family is in the limelight once again after buying troubled Pan Paper Mills in Webuye for Sh900 million. Pan Paper is worth Sh18 billion, but it was indebted to the tune of Sh10 billion by the time it was placed under receivership in 2009.”

It went on: “As at the beginning of the year 2000, the Rai’s were locked in bitter legal battles over business ownership as they had attempted to lock their partners out of the multi-billion shillings entities involved on the Rai side were Jasbir Singh Rai, Iqbal Singh Sai, Daljiti Kaur Hans and Sarjit Kaur Rai.”

They were pitted against Tarlochan Singh Rai as the first respondent, Jaswant Singh Rai 2nd respondent, Sarbjit Singh Rai3rd respondent, Rai Investments Limited 4th respondent, Rai Plywoods (Kenya) Limited 5th respondent, Rai products limited 6th respondent and Rai holdings limited 7th respondent.

The others were Tulip Properties Limited 8th respondent, The Rai Expo Park Limited 9th respondent, Tarlochan Singh Rai Limited 10th respondent, Satjit Singh &Ram Singh (Estate of) 11th respondent, PBM Nominees Limited 12th respondent, Kabarak Limited 13th respondent and Suresh Kumar Bector 14th respondent.

The other five companies that were supposed to be enjoined in the suit as respondents were Rai Products Limited, Rai Holdings Limited, Tulip Properties Limited, Rai Expo Park Limited and Tarlochan Singh Rai Limited.

THE MASSIVE RAI EMPIRE

The Rai Group known as Rai-Ply is the maker of chipboards, ceilings, block boards, parquet and wooden tiles and polythene bags for sugar companies. The group is Kenya’s largest agroforestry concern. It has spread its plywood wings to Uganda, Tanzania and Malawi – where it’s the biggest wood processor. Rai Group is also Kenya’s now largest sugar miller through its West Kenya Sugar and Sukari Industries subsidiaries in Homa Bay. It is also Uganda’s second-largest miller through Kinyara Sugar Works, besides having interests in edible oils, fats and soaps (Menengai Oil Refineries), sawmilling (Timsales), wheat farming, horticulture and real estate (Tulip Properties).

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