Court extends ban on DCI searches in businessman SK Macharia's Directline dispute

The court’s decision, which upholds the current conditions, will remain in effect until March 2025, allowing the case to continue without further searches on Macharia’s premises.

Presiding Magistrate Dolphina Alego scheduled a hearing for March 10, 2025, stating, "We will return on March 10th, 2025 for the hearing of the application; the status quo will remain."

In late September,  Macharia initiated proceedings to reclaim Directline Assurance, alleging the company had been taken over unlawfully using a forged CR12 form. 

Represented by his lawyer, Danstan Omari, Macharia is petitioning the Milimani Law Courts to recognise him and his wife as the legitimate owners of the company. 

He is also demanding transparency regarding Ksh. 8 billion allegedly misappropriated from policyholders.

“S.K. Macharia is the one who started the company with his wife. But it has come to the attention of the original shareholders that the original CR12 has been altered and shares moved. ILRA has done its investigation and confirmed that the CR12 is forged,” explained lawyer Martina Swiga.

In addition to seeking ownership restoration, Macharia is pressing for the prosecution of directors involved in the alleged fraud and for an urgent re-registration of the company’s rightful owners.

He emphasised the potential risk to 98% of public service vehicle (PSV) users who may believe they are insured but could be unknowingly unprotected.

“Directline carries 98 percent of all PSV premiums. Ninety-eight percent of PSV passengers are exposed, being misled into thinking they are insured. We have moved swiftly to compel the Registrar of Companies to register the rightful owners of the company,” Omari noted.

The dispute follows Directline’s decision to cease its insurance operations on September 10, 2024. The company’s original shareholders announced the closure, citing an unauthorised CR12 form listing other shareholders as false. 

Following the decision, the Association of Kenya Insurance Companies (AKI) was directed to stop issuing insurance certificates or stickers in Directline’s name.