The High Court has declined to strike out a petition by businessman Joel Kibe, who is seeking to be bought out by Old Mutual Holdings at a price likely to exceed Sh1 billion.
Dismissing an objection by the insurer against the case, Justice Josephine Mong’are said the issues raised by Old Mutual can only be determined at the hearing of the matter.
The insurer wanted the case struck out arguing that whereas Mr Kibe was a beneficial member of the company, he was not a registered member at the time of filing the case, hence lacked the locus to bring the matter.
“To my mind, the issues raised whether the Petitioner (Mr Kibe) was or was not a member of the company as at the time of filing the petitioner require the Court to consider facts and evidence to ascertain the true position,” said the judge.
In the matter, Mr Kibe accused the insurer of trampling on the rights of minority investors to benefit its majority shareholder --old Mutual East Africa Holdings.
The billionaire, who has 1.54 million shares in Old Mutual, obtained a court order on August 22 that stopped the company’s board of directors from selling or transferring its assets -- Equity Centre, Union House and Telkom Plaza, which house major corporate tenants in Nairobi.
In its response, the insurer denied the allegations and declared that it does not own three of the listed properties identified by Mr Kibe.
The insurer’s annual report, however, shows that the properties were owned by its subsidiaries as at December 31, 2023. This indicates that the properties were subsequently sold or Old Mutual is technically disowning them in the court battle since it does not hold their titles directly.
“I confirm that the properties in question are not owned by the applicant (Old Mutual) and have thus been wrongly included in the proceedings before this honourable court,” the insurer’s chief executive, Arthur Oginga, said in a supporting affidavit.
Mr Kibe ranks sixth on the list of Old Mutual’s top shareholders.
The insurer later filed the objection arguing that Mr Kibe was not a registered member within the meaning of Section 92, as read together with Section 780(1) and (2) of the Companies Act and therefore lacks locus standi to file the petition or seek the order.
Mr Kibe maintained that he is a shareholder of the company as asserted that he purchased 1,544,900 shares in the secondary market on diverse dates between July 22, 2014 and June 29, 2015 using a nominee account at Genghis Capital Limited.
The businessman maintained that there has been oppressive conduct against him and other minority shareholders by the majority shareholders through exclusion from management and decision-making and dilution of shares.
He also complained of alleged mismanagement and misappropriation of company assets, denial of access to company records, removal from a position of authority, unfair allocation of benefits and fraudulent and unauthorised borrowing, among others.
Mr Kibe ranks sixth on the list of Old Mutual’s top shareholders, having bought 1.54 million shares for Sh290.9 million on the over-the-counter market.
Old Mutual rejected Mr Kibe’s allegations, saying all of the corporate actions were disclosed publicly and were backed by shareholders and the board of directors.
The insurer said Mr Kibe’s investment in the company does not guarantee him a desired rate of return.
“The return on equity investments is not predetermined and can vary significantly,” Old Mutual said.
