Directline Assurance Company has issued a stern ultimatum to Insurance Regulatory Authority (IRA) Commissioner Godfrey Kiptum, demanding the immediate removal of four suspended directors’ names from the company’s CR12 form. In a 24-hour demand letter authored by prominent lawyer Danstan Omari, the insurer has threatened legal action against Kiptum should he fail to comply with the directive.
This escalation highlights a brewing controversy over the rightful leadership of the company and alleged attempts to destabilize it through fraudulent activities.
Allegations Against IRA Commissioner
In the strongly worded letter, Omari accuses Commissioner Kiptum of facilitating a fraudulent scheme aimed at allowing unauthorized individuals to take over the reins of Directline Assurance. Omari asserts that Kiptum’s actions have caused significant financial harm to the company and violated court orders issued by Justice Mabeya.
“Your actions have completely disregarded court orders… These individuals are fraudsters whose aim is to plunder the company’s assets and divert contributions,” the letter states.
The company alleges losses exceeding KSh 7 billion due to this situation and insists that the rightful shareholding structure, as represented by Dr. S.K. Macharia, be restored immediately.
Court Orders and Suspended Directors
The ongoing dispute stems from the composition of Directline’s board of directors, which includes individuals allegedly installed without proper shareholder approval. The board members in question Kenneth Ndura, Maina Mwangi, and Titus Karanja assumed office on October 4, 2024. Their appointments, according to Directline, contravene existing court orders.
Directline maintains that Commissioner Kiptum has ignored clear judicial directives by allowing these individuals to be listed as directors. Instead of ensuring compliance with the court’s rulings, the IRA allegedly facilitated their positions on the board, effectively sidelining legitimate shareholders.
Demand for Accountability
In addition to the removal of the suspended directors’ names from the CR12 form, Directline has called for the Ethics and Anti-Corruption Commission (EACC) to investigate Kiptum and other IRA officials for alleged abuses of office.
“This is a matter of determining the rightful directors of the company. Court orders have been issued, but there are still individuals purporting to hold these positions. Commissioner Kiptum must ensure the correct beneficiaries are reflected in the CR12 form,” said lawyer Shadrack Wambui, who is also representing the company.
Internal Management Disputes
The turmoil at Directline Assurance extends beyond the CR12 form issue. Earlier this month, four senior management staff members were placed on compulsory leave for allegedly opposing unauthorized payments. The company’s leadership has expressed concerns that this management upheaval is part of a broader effort to destabilize operations and facilitate asset stripping.
Call for Government Intervention
Directline Chairman Dr. S.K. Macharia has called on Commissioner Kiptum, the Cabinet Secretary, and the Principal Secretary for Finance to intervene in the matter. He urged them to prevent the alleged misuse of power by a partially constituted board of directors and ensure compliance with court orders.
“The rightful directors of the company must be recognized, and any attempts to divert assets or contributions should be stopped immediately,” Dr. Macharia emphasized.
Directline Assurance is adamant that swift and decisive action is necessary to safeguard the company’s assets and restore compliance with legal directives. The company asserts that failure to address the issue could lead to further financial losses and a continued erosion of shareholder confidence.
With a looming legal showdown and increasing scrutiny from regulatory and anti-corruption agencies, the outcome of this dispute will have significant implications for corporate governance in Kenya’s insurance sector. The next 24 hours will be critical in determining whether the IRA complies with the demands or faces legal and public backlash.
