G4S has filed the suit despite Agriculture Secretary Felix Koskei lobbying the miller’s creditors to put on hold any action to enforce recovery of their debts. PHOTO | FILE
What you need to know:
G4S has in suit papers filed at the High Court Nairobi said that the sugar miller has failed to settle the outstanding amount that it had admitted to owing in emails between November 24 and 27 last year.
The two firms entered into a contract in May 2011, which was to end in July last year, but was extended to last month.
The deal saw G4S offer security and courier services to Mumias Sugar in its various premises around the country.
Security firm G4S has sued Mumias Sugar Company over a Sh45 million debt accumulated in the past three years, adding to the woes of the troubled sugar miller.
G4S has in suit papers filed at the High Court Nairobi said that the sugar miller has failed to settle the outstanding amount that it had admitted to owing in emails between November 24 and 27 last year. It adds that Mumias Sugar had promised to settle the debt urgently, but is yet to remit any money to G4S.
The two firms entered into a contract in May 2011, which was to end in July last year, but was extended to last month. The deal saw G4S offer security and courier services to Mumias Sugar in its various premises around the country.
“Despite demand made and notice of intention to sue given, Mumias Sugar has refused to pay the said amount as a consequence of which G4S terminated the services. G4S prays for judgment against Mumias Sugar for Sh45.5 million and interest at court rates,” G4S said.
The ailing sugar miller last month secured a Sh500 million bailout from the Treasury aimed at saving it from total collapse. Mumias Sugar’s woes are attributed to mismanagement by its top executives in recent years.
G4S now claims that it was in December forced to terminate its contract with the sugar miller owing to the unsettled debt, despite signing on for an extension to January.
G4S’s legal officer says the contract with the company states that Mumias would pay an interest penalty of two per cent in the event that it was late in remitting payments.
The contract was to see the security firm increase charges in the event that G4S employees received a pay hike. G4S has also asked the court to compel Mumias to settle the costs it will incur in the legal battle for its dues.
G4S has filed the suit despite Agriculture Secretary Felix Koskei lobbying the miller’s creditors to put on hold any action to enforce recovery of their debts.
The Sh45 million owed to the security firm is part of over Sh6.5 billion Mumias owes to several financial institutions, the taxman and Kenya Power.
G4S wants Sh40.7 million for guarding services in offices around the country and its factory, Sh4.6 million for response services it offered in times of emergency and Sh173,000 for courier services.
Mumias last week moved to court seeking to recover Sh1.1 billion from four former managers — CEO Peter Kebati, finance director Chris Chepkoit, legal affairs and company secretary Emily Otieno and commercial director Paul Murgor.
The miller claims that the managers could have been the beneficiaries of a purchase plan conjured up to cater for any sugar shortfall.
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