Kibos Sugar Barons caught in Sh3B industrial sugar scam. A massive shipment of raw cane sugar meant for factories has ended up repackaged and sold as ordinary table sugar on Kenyan shelves, leaving many wondering how such a large-scale switch could happen under the watch of government agencies.
The story starts with a single ship. In late 2025 the vessel MV Agia Valentina docked at Mombasa, carrying 27, 839 metric tonnes of industrial raw sugar worth 1.5 billion shillings. The cargo came all the way from Durban in South Africa and entered the country under a special code for industrial use that carries only a 10 per cent duty rate.
That lower rate saved the importers a fortune compared with the much higher tax on refined sugar for everyday consumption. Once cleared, the sugar was supposed to stay inside factories for processing into other products. Instead, it took a different route straight to the Kibos Sugar factory in Kisumu, where workers repackaged it into smaller bags and sent it out for sale as household sugar.
Mombasa Sugar Refinery Limited handled the import on paper. The company lists a Kisumu address that connects directly to Kibos Sugar. Two directors appear on the company papers: Jasprit Singh Chathe, also known as Raghbir or Bhire, and Sukhwinder Singh Chathe, also called Raju.
Their factory became the spot where the raw shipment received new labels and new bags ready for supermarkets and small shops across the country. Industry insiders say the profit from this switch is huge because industrial sugar costs far less to bring in yet sells at the same price as refined table sugar once it reaches the market.
Cabinet Secretary Lee Kinyanjui opened a special window for these imports back in August 2025. He promised strict checks to make sure nothing left the system for the wrong use. Yet the Kenya Revenue Authority now demands end user certificates within 14 days and has placed the entire consignment under tight customs control.
Officers must physically verify every single bag and track it to its declared factory destination. Any diversion counts as smuggling under East African customs rules, and directors could face up to five years in prison if found guilty.
The Kenya Bureau of Standards issued a clear warning. Raw industrial sugar still contains fibres, soil particles, waxes and other residues that make it unsafe for direct eating without proper refining.
Most shoppers cannot tell the difference between the two types without laboratory tests, so families may have brought home bags that were never meant for their kitchens. The bureau reminded the public that this kind of sugar can carry health risks if consumed without further processing.
Domestic sugar production has dropped sharply. In the first 11 months of 2025 the country made only 551 805 tonnes against an annual need of more than 1 million tonnes. That shortage created room for these imports, yet critics say the gap also gave cover for the cheaper industrial sugar to flood the market.
Once the sugar leaves the port in bags and heads inland, tracking becomes almost impossible. The Sugar Board currently has no full quorum after a court blocked appointments since November 2023, so it cannot properly approve or reject new imports.
Sources inside the industry claim senior people in the Ministry of Trade have protected Kibos Sugar whenever questions arise. One whistleblower said every time officers try to act, a phone call comes from above and the file simply disappears.
The Kenya Revenue Authority has already flagged misclassification and undervaluation of the goods. If the sugar gets reclassified as refined consumer sugar, the government would collect an extra three billion shillings in duties that were never paid.
Kibos Sugar has not commented on the claims. The directors have stayed silent while the authority continues its verification process. For ordinary Kenyans who buy sugar every week, the story raises real worries about what ends up in their tea and porridge.
Prices remain high despite the imports, and many feel the system favours big players while small farmers and shoppers lose out. The case now sits with investigators who must sort fact from allegation and decide whether this was a simple paperwork error or something more deliberate.
As the probe moves forward, the public waits to see whether refunds, duties or even charges will follow. The Kibos Sugar Barons case has opened fresh eyes to how imports and local factories sometimes mix in ways that leave consumers paying more and getting less than they expect.
Kenya’s sugar sector has faced many challenges over the years, and this latest episode shows how much work remains to keep the market fair for everyone involved.
