Mumias accuses G4S of inflating prices to claim Sh45 million

NAIROBI: Mumias Sugar Company has accused an international security firm of increasing the cost of its services to the miller without prior agreement.

Mumias’ finance officer Jonathan Koome told High Court Judge Francis Gikonyo that G4S — which is claiming Sh45 million from the miller — breached contract terms by increasing the cost of a guard to Sh23,461 from Sh17,896 without the sugar firm’s approval.

According to Mr Koome, the initial agreement between the two companies was to run for three years until June 30, 2014.

The firms also agreed to Sh19,960 for a night guard at the miller’s Nairobi, Kisumu and Kisii offices, while a dog and its handler would cost Sh40,986, and a response car Sh297,949.

“Any increases in price had to be agreed to by the defendant [Mumias],” Koome said.

The judge heard that the amount being claimed by the security firm could not be authenticated until a full reconciliation of accounts was done.

“The statement does not substantiate how the amounts of Sh4,665,433.36 for alarms and Sh40,408,100.85 for guards were arrived at. It incorporates non-contractual debits and errors,” Koome said.

CASH-STRAPPED FIRM

In his sworn affidavit, he added that the accounts between the parties had not been settled in order to determine liability, and accused the security company of taking advantage of the cash-strapped miller.

“The plaintiff’s (G4S) notice of motion is an unmerited strategy to unjustly enrich itself from the defendant,” Koome said.

However, G4S pointed out that the sugar firm had admitted to its indebtedness.

“By e-mails dated November 24 and 27, 2014, the defendant admitted indebtedness to the plaintiff and undertook to settle the amount then outstanding, but has to-date reneged on the said promise,” papers filed by G4S read.

“Despite demands made on notice of intention to sue, the defendant has neglected, failed or refused to pay for the said services.”

G4S wants Mumias ordered to pay the outstanding amount plus interest.

The court heard that the last payment the miller made to G4S was on January 9 this year, when it sent the security company Sh5,068,623.

In June, Mumias Sugar received a Sh1 billion bailout from the Government to pay off lenders, farmers and suppliers. However, the struggling company needs an estimated Sh6.2 billion to clear its debts.

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Mumias Sugar G4S