Business mogul sues Old Mutual over Sh700m shares row

Old Mutual building in Nairobi, on September 2, 2021. [File, Standard.]

Businessman Joel Kamau Kibe has filed yet another case against insurance firm, Old Mutual Holdings PLC, demanding more than Sh700 million in a row over 1.5 million shares he allegedly purchased in 2014.

Kamau, who is a former CMC director is also seeking dividends from 2018 and an account of the insurer's assets and shareholding.

The business Mogul in his case, filed before the Commercial High Court, accused Old Mutual of allegedly withholding his shares records.

He further claimed that the firm also allegedly failed to regularise his investment and failure to release the same.

"The defendant has, without any lawful justification, denied the plaintiff the ability to realise the value of his investment while permitting selected shareholders to dispose of their shares at premium valuations. The cumulative effect of these actions amounts to a breach of fiduciary duty, a breach of trust and an abuse of the plaintiff's rights as a shareholder," he alleged.

According to Kamau, Old Mutual allegedly made a unilateral decision to sell its shares in UAP Insurance Tanzania Ltd. He claimed that he did not give his consent for the sale, adding that he allegedly did not get the money acquired through the sale.

Kamau alleged that he invested more than Sh 246 million into the firm. He said that initially, Old Mutual was known as UAP Holdings Ltd but allegedly rebranded on May 13, 2012.

According to him, the buyout allegedly gave dominance to majority shareholders while not giving the minority a chance for exit.

"The plaintiff states that this failure has unlawfully trapped him in an illiquid and irregular investment position. Moreover, the subsequent suspension of over-the-counter trading has completely deprived the plaintiff of any avenue to dispose of, transfer or realise the value of his shares, leaving him in a state of perpetual limbo contrary to the legitimate expectations created by the prospectus and the Capital Markets Authority's approval of the public offer," claimed Kamau.

In the initial case, Kamau sued the firm's parent company, Old Mutual East Africa Holdings, in a buyout battle. He claimed that an alleged move to take up loans that would be converted into shareholding would dilute small investors' investments.

The insurer asked the court to dismiss the case, arguing that it had no powers or authority to sue or pursue the insurer in a liquidation case. According to Old Mutual, Kibe was not a member of the insurer as he was not registered at the time, he was filing the case.