- The Senior counsel is representing the Kenya National Trading Corporation, a State Corporation in the Ministry of Trade.
- He questioned why LSK hand-picked cooking oil for certain corporations and left out other products.
Image: FILE
The government risks losing Sh17 billion in the next six months if the High Court does not set aside orders suspending a decision to import 125,000 metric tonnes of duty-free edible oils.
Senior Counsel Ahmednasir Abdullahi told Justice John Chigiti that the goods were already imported and are currently at a warehouse in Mombasa.
"The order the court issued is draconian. It has caused undue hardship. If you keep perishable goods in a warehouse for the next six months, we will lose Sh17 billion," Ahmednasir told the court.
The Senior counsel is representing the Kenya National Trading Corporation, a State Corporation in the Ministry of Trade.
He questioned why the Law Society of Kenya which brought the suit before the court isolated and hand-picked cooking oil for certain corporations and left out other products like wheat, rice, sugar and beans which were part of a February circular by the government.
He faulted the LSK for failing to explain the rationale for picking edible oil.
Ahmednasir said the order should be discharged because it was not for the public good.
In a circular dated February 14, the Cabinet through the executive office of the President approved the positioning of KNTC as an anchor agency of the State initiatives to create price stabilisation for essential household food items.
Following this approval, the government embarked on importing large quantities of rice, cooking oil, sugar wheat and beans duty-free through KNTC.
This was part of a larger plan to tame the rising cost of essential commodities.
LSK in its court papers said it challenged the administrative actions and decisions of the state in approving and facilitating the duty-free importation and clearance of products, in particular edible oil.
Justice John Chigiti after hearing their application, issued an ex parte order stopping any further implementation of the state's decision.
This order is what was being disputed in court by the corporation.
Ahmednasir in urging the court to discharge the order, said the person whose decision is being challenged is that of Treasury CS Njuguna Ndungu.
"But from a look at the proceedings, the CS is not a party to the case but the Principal Secretary whose decision is not before the court," he said.
In a brief rejoinder, LSK urged the court to dismiss the application by the state Corporation.
It said the order if discharged will disadvantage local manufacturers who are in limbo on how they will fit into the state's intervention in the supply chain.
"What this approval by the minister is doing is killing the manufacturing business," LSK said.
It argued that people are going to lose their jobs because local manufacturers won't be able to compete with the low prices being proposed by the government.
"If this action will affect local manufacturers this way, why didn't the minister call these locals and ask them if they can provide this kind of subsidy? There was discrimination in this adverse act," LSK said.
Asked why they picked on edible oils and not the other items in the circular LSK said, "We isolated rice, sugar, wheat and beans because the kind of impact it will have on local manufacturers is huge. These people will lose their jobs."
LSK further said that the Finance Minster did not have the power or authority to write a letter to the Kenya Revenue Authority granting an exemption for the stated goods.
"The Minister has no power under our constitution to grant an exemption. Exemptions are granted dinky through legislation," it said.
Justice Chigiti after hearing the matter scheduled September 1 for a ruling on whether the court will set aside its order.