The eldest son of Naivas Limited founder Newton Kagira Mukuha has lost an application seeking to find his siblings in breach of a court order over the sale of shares of the supermarket chain.
A bench of three judges of the Court of Appeal dismissed Mr Kagira’s application, stating that he failed to demonstrate that his siblings willfully failed, refused or disobeyed a court order regarding the shares of the company.
“We note that the applicant is apprehensive that the actions of Naivas International [the holding company of Naivas Limited] company will muddle up and pre-empt the issues pending before Court,” Justices Kathurima M’Inoti, Fatuma Sichale and Fred Ochieng ruled.
“However, the applicant has not demonstrated to us that the status quo pertaining to the disputed 10,000 shares in Naivas Limited, has been violated by the respondents.”
The judges said Mr Kagira was essentially inviting the court to lift the corporate veil, in order to attribute to his siblings, the actions allegedly undertaken by Naivas International, Gakiwawa Family Investment (the family’s investment vehicle) and Mambo Retail (the vehicle through which foreign investors have acquired a cumulative 51 percent stake in the retailer).
Mr Kagira submitted that he is a beneficiary of the estate of the late Peter Mukuha Kago, who died on May 6, 2010, and left behind a widow and nine children.
He said there are several cases pending before various courts over the estate and that on November 25, 2021, the court issued an order for the status quo to be maintained, over the shares in dispute at Naivas Ltd, pending the determination of the appeal.
He, however, accused Linet Wairimu, Grace Wambui, David Kimani and others of disregarding the court order and disposing of or interfering with the shareholding and ownership of Naivas Limited.
Mr Kagira claimed that in a resolution on April 24, 2018, by Naivas Limited, 50,000 shares were transferred to Naivas International.
He said the directors of Naivas Limited also incorporated Naivas Holdings Limited in Mauritius on November 21, 2017. The company later changed its name to Gakiwawa Family Investment on August 8, 2018, he submitted.
Further, in February 2020, Gakiwawa Family Investment sold a 30 percent stake in Naivas International to International Finance Corporation, German Fund, MCB Equity and Amethis Retail.
He added through his lawyer that 10,000 shares divided between Charles Mukuha, Linet, Grace and David were transferred to Naivas International.
He said the continued sale of the shares is in violation of the court order.
The judges noted that it is only after Naivas Limited published the fact that the IBL Group would subscribe to an additional 11 percent share in Naivas International, allowing Mambo Retail Limited to take a controlling stake of 51 percent in Naivas International on July 3, 2023, that Mr Kagira moved to court.
The judges said Mr Kagira did not demonstrate how the shareholding of Naivas Limited has changed.
“It is apparent that the Court did not direct either party to do or abstain from doing anything. The Court merely stated that the status quo be maintained with regard to the shares in dispute, thus the disputed shares were to remain as they were at the time the order was issued,” the judges said.
