We wouldn’t have known the story had sugar baron Ibrahim Noor Hillowly not gone to court. Hillowly had gone to court after the Kenya Revenue Authority (KRA) demanded Sh2.5 billion in taxes on a sugar consignment that the billionaire had imported into the country.

The consignment – still held in Mombasa – is humongous: 40 million kilos of sugar which is equivalent to a kilo for every Kenyan! It is a saga that reveals what happens behind the scenes when the government opens a window for traders to import sugar duty-free to ostensibly deal with a crisis, either real or staged.


The story starts ahead of the 2017 General Election, when sugar disappeared from the shelves. Journalists were told that this was due to prevailing drought and that the loss-making Mumias Sugar Company (MSC), the largest in Kenya, had been shut for “routine repairs”. That was in April, 2017. As a result, consumers were restricted to buying two packets and the prices rose to levels last witnessed in 2012 when there was yet another sugar crisis: again, during an election year (The polls were later pushed to March 2013).

Before the government intervened in May 2017 after a national outcry, a two kilogramme packet of Mumias brand was retailing at Sh390 while the Sony brand was retailing at Sh380. Compare that with Sh300 that sugar was retailing at in February.

The media were awash with stories of the sugar crisis and it was easy to explain the shortage with numbers. After all, Kenya produces 600,000 metric tonnes (MT) of sugar per year against a demand of 870,000 MT. As a result, the country imports the balance from the Common Market for Eastern and Southern Africa (Comesa) countries creating powerful moguls who could rival Brazil’s sugar tycoon Maurilio Biagi Filho.


When the 2017 shortage hit,  then Cabinet Secretary Willy Bett said millers would also be allowed to import sugar from abroad and rebrand it in their own packages since the Comesa countries were also facing a crunch. For a country that consumes about 50,000 tonnes of sugar in a month, the expected imports were an equivalent of the country’s six-month sugar demand. It was also a chance for traders to make a kill – but only if they played by the rules.

Ibrahim Noor Hillowly and his company Darasa Investments Limited was one of those who sought to bring in sugar, duty free. Everything went well until a hawk-eyed KRA official noticed discrepancies in the import documents and the sweet story turned soar.

It was not the first time that Kenyans were hearing about the businessman. In 2010, he had been arrested over suspicions that he was a Somali citizen who had illegally acquired Kenyan citizenship. The court ordered police to return the identity card and passport to him.


It was while addressing the court that people got a glimpse of this man. “I am a Kenyan and own a Sh700 million estate in Eastleigh estate besides other property,” he said while opposing a bid by the police to have him locked up pending further investigations.

The property in Eastleigh’s General Waruinge Street is the popular Comesa Shopping Mall which is built on a six-acre plot by his Darasa Investments Limited and estimated to have cost the developer Sh3 billion.

The building of the mall followed court battles with a local church and finally the 300-store mall opened doors in November 2016.  The controversial plot was sold to the businessman by two former church members who are being sought by police over claims of forgeries and Darasa obtained court orders to occupy the property.

When the window to import duty free sugar was opened, Mr Hillowly lined up to make some money. The first notice followed an Executive Order issued by President Uhuru Kenyatta declaring famine and drought as a national disaster. The notice, issued by Henry Rotich, the Cabinet Secretary for National Treasury, exempted from duty “sugar imported by any person, with effect from May 12 and August 31, 2017.”


Several of the importers complained to then CS Bett that they could not bring in their consignments before the set deadline due to “logistical difficulties and low tides” and they sought an extension. On October 4, another Gazette notice was issued to allow in duty free any sugar that was “loaded into a vessel between September 1, 2017 and December 31, 2017, destined to a port in Kenya and consigned to a local sugar miller.”

A blanket letter was written to KRA by Mr Rotich, approving the release of any consignment as long as they provided necessary documents “that may be required for customs clearance.”

But there was a problem with Darasa Limited’s cargo and the company was caught. In court documents, Mr Hillowly had said that he purchased the 40,000MT of Brazilian brown sugar on July 15, 2017 from Sabina Engineering Company at a cost of $21.2 million (Sh2.12 billion) which was within the import window. The consignment was loaded into MV Anangel Sun at Santos Port, the busiest container port in Latin America.


MV Anangel Sun is not an ordinary vessel and measures 250 by 43 metres. A bulk carrier registered in Greece and built in 2011, Darasa Investments Limited told the court that the vessel could not dock at the Mombasa port because it could not be accommodated due to its size.

Why a vessel that could not dock at the Kilindini port agreed to carry sugar cargo destined to Kenya perplexed KRA officials who were handling the case. Records show that the largest vessel that has ever entered Mombasa was MV Clemens Schulte, chartered by Maersk Shipping Line, and which is 255 metres long and 37.3 metres wide. This safely docked at the port in August 2015 on Berth 19 which can accommodate ships with an average draft of 13.5 metres. Draft determines the minimum depth of water a ship or boat can safely navigate — and that information is known by all ship captains carrying cargo. And that raised the question: Was Darasa Limited’s cargo aboard Anangel Sun?


Mr Hillowly told the court that mv Anangel Sun was unable to berth “due to unfavourable weather conditions at the Mombasa port coupled with (its) sheer size.”  Because of that, he said, the ship sailed northeast to United Arab Emirates’ Jebel Ali port where the consignment was offloaded and stored at Multi Commerce FZE. It was then loaded into a smaller vessel, MV Iron Lady, that finally brought the sugar to Mombasa. That is the story he told.

The problem with Mr Hillowly’s controversial cargo was that there was no evidence that MV Anangel Sun was loaded with sugar destined to Kenya — after all, and they said as much, it could never dock in Mombasa.

Also, the documents he filed in court indicated that the owner of the sugar aboard mv Anangel Sun as it left Brazil was Uganda’s Sabrina Engineering Company Limited while the shipper quoted in the bill of lading was Madrid’s Angolgest Consltoria Gestion. But the ownership of the cargo seemed to change when the ship offloaded its cargo in Dubai and another bill of lading shows the shipper as Lumira General Trading for Multi Commerce FZC.


KRA was unable to deal with a cargo that had two bills of lading, issued in two different countries. When they were questioned about these anomalies, Darasa said the sugar was inspected and certified by Dubai government authorities and here now was a cargo with two ports of origin. KRA says that Dubai customs could not verify this import since it is not a sugar producing country and, if indeed it was destined to Kenya, it never then entered the Dubai jurisdiction.

And then came the biggest shocker. The documents indicated that the sugar was produced in August 2017 and September 2017 which begged the question: If indeed the sugar was purchased in July, when it was loaded into MV Anangel Sun, did Darasa load unproduced sugar!


It was due to these anomalies that KRA asked them to pay Sh2.6 billion duty and the company went to court seeking to overturn KRA’s demand through a judicial review. A month ago, High Court Judge Erick Ogola allowed Darasa to offload the sugar duty free.

But this week, the Court of Appeal held that Darasa should pay the import duty and that the company should have taken its case to the tax tribunal and not the High Court. It also said that Darasa failed to confirm that they had indeed imported the cargo within the exemption period.

Whatever sugar games Mr Hillowly was playing are now open to debate. But his case gives us an insight into the sugar trade.

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