High Court bars Old Mutual management from selling the company's assets

The High Court in Nairobi has issued orders stopping the current management of Old Mutual PLC from selling assets of the company.

This after a petitioner, who is also a shareholder in the insurance company, moved to court challenging the decision of the company to sell its Tanzanian subsidiary, UAP Insurance Tanzania, for Ksh.73.5 million.

In the case, Joel Kamau Kibe claims that Old Mutual was listed by the Capital Markets Authority (CMA) in November 2012 after a public offer.

It is his argument that the directors and key shareholders of Old Mutual started disposing their shares and leaving the company.

“In January 2015, one of the key investors in the UAP Holdings Dr. Christopher Kirubi was allowed by the company to make a direct sale of his 20,262,808 shares being 9.58% of the issued ordinary shares to the company Respondent for Ksh.3.2 billion,” reads court papers.

It is his argument, together with other minority shareholders, that they have been systematically excluded from participating in the management and decision making processes of the company.

Similarly, he claims that majority shareholders have denied him and other minority shareholders access to crucial company records including financial statements, minutes of board meetings, and other documents.

Kibe argues that the lack of transparency contravenes Section 779 of the Companies Act 2015, which entitles shareholders to inspect company records and be kept informed about it’s affairs.

“It is therefore evident that the affairs of Old Mutual PLC herein are being conducted in a manner oppressive to some part of its members including the Petitioner,” reads court papers.

He claims that the company is not making profits because of misappropriation of funds and insider trading fraud, adding that UAP Holdings PLC rebranding to Old Mutual Holdings PLC completely lost its corporate identity.

“The transaction was secretive and the Petitioner and/or other minority members were not consulted on the entire exercise. To date the share Certificates of the new holding company have never been issued and the sale of shares over the counter was halted leaving the Petitioner with nothing to show for his immense investment,” stated the court papers.

Other orders that Kibe is seeking are that Old Mutual Holding PLC accounts be investigated, further that the company be liquidated under provisions of the Companies Act and the Insolvency Act.