The High Court in Nairobi has issued an injunction preventing the management of Old Mutual PLC from disposing of the company’s assets. This court order comes in response to a petition filed by Joel Kamau Kibe, a shareholder in the insurance giant, challenging the decision to sell its Tanzanian subsidiary, UAP Insurance Tanzania, for Ksh.73.5 million.
Kibe’s petition highlights a broader issue of alleged mismanagement and lack of transparency within Old Mutual PLC. According to Kibe, who, along with other minority shareholders, has been systematically excluded from the company’s management and decision-making processes, the sale of the Tanzanian subsidiary is part of a troubling pattern of behavior by the company’s directors and major shareholders.
Old Mutual PLC, which was listed by the Capital Markets Authority (CMA) in November 2012 following a public offer, has faced a series of challenges since its rebranding from UAP Holdings PLC. Kibe argues that key investors, including Dr. Christopher Kirubi, who was allowed to sell his shares directly to the company in 2015, have been pivotal in a series of transactions that have led to the current crisis. Kirubi’s sale of 9.58% of the company’s shares for Ksh.3.2 billion is highlighted as a notable instance of preferential treatment.
Kibe and other minority shareholders assert that they have been denied access to essential company records, including financial statements and board meeting minutes. This lack of transparency, they argue, violates Section 779 of the Companies Act 2015, which guarantees shareholders the right to inspect company records and stay informed about its affairs.
The petition paints a picture of a company marred by misappropriation of funds and insider trading fraud, which Kibe believes has led to its poor financial performance. The rebranding of UAP Holdings PLC to Old Mutual Holdings PLC, according to Kibe, resulted in a loss of corporate identity and further disenfranchised minority shareholders.
In addition to seeking a halt on asset sales, Kibe is demanding a thorough investigation into the company’s accounts. He also proposes that Old Mutual PLC be liquidated under the provisions of the Companies Act and the Insolvency Act if the mismanagement and fraud allegations are proven to be valid.
The court’s decision to bar the management from selling assets is a temporary measure intended to prevent further potential harm to the company’s value and the interests of its shareholders while the case is being heard. This development underscores the need for greater accountability and transparency in the management of publicly listed companies.
The situation at Old Mutual PLC serves as a stark reminder of the complexities and potential pitfalls in corporate governance, especially in large, publicly traded companies. Shareholders’ rights and the ethical management of assets remain central issues, and the outcome of this legal battle could set important precedents for how such matters are handled in the future.
As the case progresses, all eyes will be on the High Court’s next steps and how Old Mutual PLC addresses the serious concerns raised by its shareholders. The outcome will likely have significant implications not only for the company’s future but also for the broader corporate landscape in Kenya.
