The High Court on Friday issued an order restraining Old Mutual PLC from selling any of its assets pending the hearing and determination of a lawsuit brought by a shareholder. Joel Kibe, a shareholder in the insurance company, filed the case challenging the company’s decision to sell its shares and assets without proper consultation.
In July, Old Mutual Holdings PLC sold its Tanzanian subsidiary, UAP Insurance Tanzania, for Sh 73.5 million. Kibe argues that such sales are being carried out without the involvement of shareholders like himself. Justice J.W. Mong’are granted the order to halt any further asset sales and directed that the respondents be served with the court application.
Kibe’s court filings reveal his concerns about a lack of transparency in Old Mutual’s operations. He alleges that since the company was listed by the Capital Markets Authority in November 2012 following a public offer, key shareholders and directors have been systematically selling off their shares and withdrawing from the company, leaving minority shareholders in the dark.
The suit highlights the case of Dr. Christopher Kirubi, a prominent investor who, in January 2015, sold 20,262,808 shares, representing 9.58% of the company’s issued ordinary shares, for Kshs 3.2 billion. Kibe claims that this sale, like others, was carried out without the knowledge or involvement of minority shareholders.
Kibe and other shareholders claim they have been excluded from critical management decisions and have been denied access to vital company records, including financial statements and minutes of board meetings. Kibe argues that this lack of transparency violates Section 779 of the Companies Act 2015, which entitles shareholders to inspect company records and be informed of the company’s affairs.
In his petition, Kibe also contends that the company has been losing money due to misappropriation of funds and insider trading. He further alleges that the rebranding of UAP Holdings PLC to Old Mutual Holdings PLC has caused the company to lose its corporate identity and direction.
“The transaction was secretive, and neither the petitioner nor other minority shareholders were consulted,” court documents read. Kibe also stated that since the rebranding, share certificates for the new holding company have not been issued, leaving him and others with nothing to show for their investments.
The court will continue to hear the case, with further directions expected soon.
