The High Court has ordered a fresh valuation of an aviation firm in a buyout dispute between shareholders.
Commercial Court Judge Njoki Mwangi set aside a business valuation report on Blue Bird Aviation Ltd by RSM East Africa Ltd and directed that Yusuf Abdi Adan, Hussein Ahmed Farah, Hussein Unshur Mohamed, Mohamed Abdikadir Adan, and the firm appoint new a valuer.
The court had ordered that Ahmed, Unshur, and Abdikadir should buy out Abdi's stake in Bluebird Aviation.
However, Abdi moved back to the court arguing that the Sh320 million valuation did not represent the true value of the 31-year-old airline.
Justice Njoki in her ruling stated that if the value of the aviation firm is found to be less than the amount, then the money, which is already deposited to the judiciary, will be deducted and the excess amount will be handed to Bluebird.
The judge said if the valuation will find that Abdi's stake is more than Sh320 million, Bluebird Aviation will top up the difference within seven days after the report is filed.
"The sum held in court shall be released to the applicant's (Abdi) advocate within seven days of the valuation report being filed in court, subject to the value that will be determined of the applicant's shareholding in the fourth respondent (Bluebird Aviation)," ruled Justice Njoki.
Justice Njoki said the valuation by RSM was opaque as it did not disclose the source of its information.
"RSM Ltd's conduct points towards a lack of transparency. A valuer must always remain unbiased and independent, more so when appointed by rivalling parties. if the valuer concedes to the fact that the valuation is based on various sources including audited financial statements which he was instructed to rely on, he should not have denied one of its appointing authorities access to the said statements," she said.
She also ordered that Abdi will bear the cost of the fresh valuation.
In the case, Abdi had asked the court to set aside the report by RSM. He also asked the judge to appoint a new firm to conduct a valuation within 14 days to ascertain the value of his shareholding in Bluebird.
Abdi stated that the Sh320.92 million value submitted by RSM was speculative as financial statements relied on were not provided to support the amount.
He accused RSM of failing to conduct an independent valuation. According to him, RMS underquoted the value of some of the aircraft to deny him a fair stake in the firm.
Abdi's co-shareholders opposed the case. Unshur argued that Abdi was trying to review court orders without invoking the right law.
He said all parties unanimously agreed to appoint RSM to carry out the valuation. He stated that Abdi never challenged the consent order.
Unshur told the judge that RSM conducted Bluebird's valuation and submitted a report on December 6, 2021, out of the mutual agreement between them all. He argued that the application had been overtaken by events as the court's deputy registrar had already signed share transfer forms in his favour and submitted them to the Companies Registry to effect the changes.
He said the Sh320.92 million had already been deposited to the judiciary's account at KCB, adding that Abdi is no longer a shareholder.
