Court saves SK Macharia and wife

By Judy Ogutu
Media owner, Samuel Kamau Macharia and his wife Purity got a temporary relief after a High Court stopped an order placing his estate under government supervision.

However, the order is conditional, as they have to deposit Sh45 million which will be held in joint names of the advocates for the
parties until an appeal they have lodged is finalized.

Macharia is the owner of Citizen TV and several radio stations across the country. The two had earlier deposited Sh34million with the court as security.

Milimani Commercial Court Judge, Justice A Mabeya increased the deposit to the Sh45million. The money, which will now be held in the joint names of the advocates, should be increased within 21 days.

They had argued that if the temporary order is denied, their affairs will be taken over by the Official Receiver. The then High Court Judge, Justice Martha Koome (now appeal judge) had placed their estate under government supervision after they lost a
bankruptcy suit.

She had made the ruling that the two had failed to pay a debt of Ksh 500,000 which they acquired in 1986. The debt had accrued to 34,854,510 shillings as at May 2009.

The case was filed by Ocean Freight Transport Company against the owners of Royal Media Services.
The company intended to buy a plot along Enterprise Road in Nairobi'sIndustrial area in 1986 and Gathoni who had the allotment letter offered to sell the plot to the company.

The court observed that Ksh 500,000 was paid to Gathoni as deposit for the transaction and the balance was to be paid after a title was issued.

However the transaction never took place as the plot that the company was led to believe was in Industrial Area was indeed located along Nairobi's Biashara Street within the CBD. The company sought a refund of its money but after realizing it was
not forthcoming went to court.

The court heard the matter and ruled that the company ought to be refunded its money. Ocean Freight Transporters had gone to court seeking to have the two declared bankrupt.

In the judgment Koome observed that Macharia and Gathoni have used every opportunity to avoid paying the money by raising complicated legal technicalities.

The court asserted that there was no illegality in the company asking for its deposit back since the intended transaction was not completed adding there was no evidence to suggest that the transaction was completed.

The two, while urging the court to issue the temporary orders said they were associated with one of the largest media houses in Kenya and the receiving order has drastic consequences.

On its part, Ocean Freight said the two needed to show that will suffer substantial loss if the temporary order is denied. Justice Mabeya said he was of the view that if the stay (temporary order) is denied, the affairs of the two will be taken over by the
Official Receiver.

They had argued that publication of the order will adversely affect their leading media houses as they can no longer hold directorships thereon.

“Of course that business which does not only sustain the applicants but also other Kenyans depend on it, is a matter of public interest,” the judge ruled.