Nairobi — Nzoia Sugar Company has denied a report by the Auditor General last week that indicated that it is technically insolvent and operating on a negative working capital.
The company is reported to have debts amounting to Sh16billion hence making it hard to even meet its basic financial obligations.
The second largest sugar milling company however said the report presented to Parliament's Public Investments Committee, did not include all the required records especially the cash books while carrying out the forensic audit.
In a statement on Friday, Nzoia Sugar company's Managing Director Saul Wasilwa said the audit focused on the period prior to 2004 when the company was making losses amounting to Sh17billion and ignored the period after, when it was back to profitability.
"From 2004-2011 the company consistently made profits peaking off at Sh428million in 2009. The profit for 2012/13 was Sh226million. The company has put in place strategies that will make it remain profitable, "he reiterated.
Wasilwa says the miller is able to meet its financial obligations 'but at the moment, the company like any other in the industry, is faced by challenges caused by declining sugar prices."
The parliamentary committee had earlier commissioned the office of the Auditor General to carry out the audit to ascertain allegations of both malpractice and financial challenges.
"Despite the hard times occasioned by declining sugar prices, the company continues to meet its financial operations albeit with delays on some occasions and we sincerely that our suppliers," he noted.
Wasilwa said the government is currently committed to restructure the company's balance sheet and privatize the company which he says will enable expansion, modernization and diversification.
"We have no tax arrears at the moment," he said.