A section of Western Kenya leaders has criticised the move by the KCB Group to place the troubled Mumias Sugar Company (MSC) under receivership.
The debt-ridden miller was on Tuesday placed under receivership after it defaulted on loans amounting to Sh12.5 billion which it owes the bank and other creditors.
KCB has appointed Mr Ponangipalli Venkata from the Tact Consultancy as the substantive receiver-manager to take over the management of the Nairobi Securities Exchange-listed firm.
Bungoma Senator Moses Wetang'ula criticised the move arguing a conflict of interest will arise since the State is a shareholder in both the KCB and Mumias.
In a tweet on Friday, the senator pledged to unite leaders from Western Kenya to address the issue.
"Allowing Mumias to go under receivership is a terrible mistake. Receiverships have never saved any enterprise. With government holding substantial interests in KCB and MSC the move on Mumias is sinister. I will bring together key leaders from our region to respond," Wetang'ula tweeted.
Expressing similar sentiments, former Kakamega Senator Boni Khalwale noted receivership will only put the troubled miller and other government institutions at loggerheads.
"KCB is a government institution. Government is the single largest shareholder in Mumias Sugar Co. Ok, MSC owes KCB, KRA, KPLC, etc, billions of shillings, but then how can a government institution put its own government under receivership?" Khalwale posed.