Court dismisses bid to block businessman Joel Kibe's petition against Old Mutual

The case involves allegations of mismanagement, oppressive conduct, and misappropriation of assets by the majority shareholders of the company.

The ruling came after Old Mutual Holdings sought to block Kibe’s petition, arguing that he lacked the legal standing, or locus standi, to file the suit. The company argued that Kibe was not a registered member of the company at the time the petition was filed, which is a requirement under the Companies Act and the Insolvency Act to seek a liquidation order.

Kibe, who had bought shares in the company between 2014 and 2015, countered that as a shareholder, he had the right to file the petition. He claimed the majority shareholders had engaged in various acts of oppression, including excluding minority shareholders from management, misappropriating company assets, and denying access to key company records.

In his submission, Kibe argued that the preliminary objection raised by the Respondent was not a "pure point of law," but rather a factual matter that required a full hearing to determine whether he was indeed a member of the company at the time of filing the petition.

In a ruling on Tuesday, Justice Josephine Mongare referenced the landmark case of Mukisa Biscuits Manufacturing Co. Ltd. v. West End Distributors Ltd. (1969) EA 696, stating that a preliminary objection can only succeed if it is based on clear legal grounds and does not require the court to delve into factual details. 

"Accordingly, I am satisfied that the Preliminary Objection has failed the test set out in Mukisa Biscuit(Supra) and the same is therefore found to be unmerited and dismissed forthwith. The Court will therefore at the appropriate time consider the Application filed by the Petitioner herein," ruled the judge.

The judge ruled that the issue of the Petitioner’s membership required a more detailed examination of the facts, which could only be done during a full hearing.

"Having considered the arguments put forward by all the parties, I note that the issues raised by the Respondent are not pure points of law suitable for determination at this juncture. To my mind, the issues raised whether the Petitioner was or was not a member of the company as at the time of filing the petitioner require the Court to consider facts and evidence in order to ascertain the true position," the court noted. 

As a result, the court dismissed the preliminary objection, allowing Kibe’s petition for the liquidation of Old Mutual Holdings to proceed. The case will now continue, with the court set to consider the merits of the allegations of oppression and mismanagement raised by the Petitioner.