Telkom taken to court over sh 1.7 billion tender disagreement

Telkom Kenya's new major majority shareholder Helios Investment Partners is faced with an uphill task to settle legal battles surrounding it.

The UK-private equity company will now have to battle a Kenyan telecommunications equipment maintenance firm affiliated to ZTE Corporation over Sh 1.7 billion contracts signed in April 23 this year.

The tender was advertised last year and had attracted five international firms, including Huawei. After considering the bids, Telkom preferred Apex Vision Limited   and it signed the deal this year.

But the agreement between the two companies grew cold over hiring of a project manager proposed by Orange's Chief Technical and Information Officer Jean Marie Garcia.

According to court documents filed by Apex's lawyer Charles Kihara before High Court judge Olga Sewe, the Telkom ICT boss insisted that the deal could only culminate once an Iranian national was absorbed into the company.

Mr Kihara told the court the Iranian, Mr Vahagn, was employed for three months after succumbing to pressure but was kicked out after a review of his performance.

He said that Apex did not renew the contract over concerns on limitations set by law for employing foreign nationals when there are locals who have identical skills.

Mr Garcia's man was also said to have been uncooperative with the rest of employees in Apex and could only take instruction from his point man.

"Shortly after awarding the contract   and in unclear circumstances and unkown reasons   to the plaintiff   the defendant officer Jean Marie Garcia, CTIO insisted and strongly recommended   that the plaintiff engages a person by the name Mr Vahagn."

“In a number of meetings between Mr Garcia and Apex Vision, he continued to put pressure on us to have Mr Vahagn employed and failure to do so he threatened to cancel the contract," the court was told.

Justice Sewe also heard that Telkom had also withheld Sh262 million for works done for the last two months.

"The defendant has not made any payment that is due owing now Sh 262,000,000 as a result the plaintiff continues to use its money to   use its money to fund the project."

Apex lawyer pointed that it has incurred Sh373 million by entering into contract with third parties.  Mr Kihara argued that his client has fears that the contract might be changed.

Justice Sewe ordered that status quo should me maintained until further orders from the court. She also ordered Telkom to compensate Apex   for any losses it may lawfully suffer during the course of the case.

The case will be heard on November 30.