The long-running war between the Kenya Bureau of Standards and Kwale International Sugar Company Limited has exploded again, this time with KEBS asking the High Court in Kwale to declare the troubled miller effectively insolvent and force it to deposit Sh135 million as security for costs.
In fresh filings seen in court, KEBS argues that Kwale Sugar’s finances are in such disarray that recovering even basic court-ordered payments has become a battle. The bureau says the company has ignored a taxed costs order of Sh663,810 issued by the Court of Appeal in 2022, a debt stemming from the bitter constitutional petition the two sides have fought for nearly a decade.
KEBS now wants the court to compel Kwale Sugar to deposit the Sh135 million immediately, warning that leaving the matter hanging would defeat justice in what it terms a public-interest case involving consumer safety, regulatory enforcement and alleged corporate deception. The agency insists the money is a procedural requirement tied to earlier rulings.
Behind the latest application lies a messy trail of insolvency proceedings that paint the once-promising miller as a company collapsing under its own weight. Court documents reveal that Kwale Sugar is battling multiple insolvency cases, including Milimani Insolvency Petition No. 007 of 2019 and High Court Insolvency Cause No. E020 of 2021. KEBS says the miller has been quietly shifting assets to related companies and operating through proxies, moves the bureau claims are designed to dodge creditors and frustrate regulators.
The two institutions have been locked in an ugly standoff since 2018 when KEBS and the Kenya Revenue Authority seized about 5,000 tonnes of Kwale Sugar’s brown sugar after lab tests allegedly detected mercury contamination. The finding triggered a nationwide scare and helped ignite what became known as the “poisoned sugar” scandal.
Kwale Sugar dismissed the tests as faulty and politically driven, insisting its sugar had passed earlier quality checks and that KEBS officers bungled the sampling process. The company moved to court to stop the destruction of its stocks and briefly secured an injunction as the case dragged through the system.
The saga took another twist in 2025 when a Mombasa court acquitted 11 KEBS and KRA officials who had been accused of mishandling the mercury-laced sugar investigation. The magistrate ruled that prosecutors had failed to prove any wrongdoing, dealing a blow to efforts to assign institutional blame for one of the most dramatic food-safety scares in recent memory.
For KEBS, however, Kwale Sugar’s acquittal-driven reprieve does not erase its mounting financial troubles. The standards regulator now wants the court to treat the miller as insolvent until it proves otherwise, arguing that the company has shown a consistent pattern of evasion, non-payment and asset diversion.
If the High Court grants KEBS the Sh135 million security order, the ruling could accelerate the unravelling of a miller that once touted itself as the future of sugar production at the Coast. For now, the dust from the mercury scandal has settled, but the financial wreckage it left behind appears to be catching up with Kwale Sugar fast.
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