Kenyan Billionaires Increasingly Challenge Corporate Giants in Court

Kenya’s billionaires are flexing their financial muscle in courtrooms, signaling a new trend where the country’s elite take on corporate giants in legal battles.

These wealthy individuals, with significant stakes in companies listed on the Nairobi Securities Exchange (NSE), are now asserting their rights, challenging multinational corporations on issues ranging from acquisitions to corporate governance.

This shift towards legal activism reflects not only their growing influence but also a broader push for accountability and fairness in business dealings.

Ngugi Kiuna’s Battle Against Carbacid Acquisition of BOC Kenya

Ngugi Kiuna, a notable shareholder in BOC Kenya, has been contesting the proposed acquisition of the company by Carbacid.

However, his efforts faced a setback last week when the Capital Markets Authority (CMA) Tribunal ruled that the buyout proposal had met all necessary disclosures.

Kiuna, who holds an 11.2% stake in BOC Kenya, had opposed the acquisition since it began in November 2020. He argued that the capital markets regulator made an error in approving the deal, citing an undervaluation of the company.

Carbacid, alongside its affiliate Aksaya Investments LLP, offered to purchase 100% of BOC Kenya at Ksh 63.5 per share, valuing the acquisition at Ksh 1.2 billion.

However, Dyer and Blair Investment Bank, an independent advisor, valued the company at Ksh 91.76 per share in early 2021, further fueling Kiuna’s opposition.

While Kiuna has the option to appeal to the High Court, the CMA Tribunal’s ruling has complicated his efforts.

Joel Kibe’s Dispute with Old Mutual Plc

Joel Kibe, the sixth-largest shareholder in Old Mutual Plc, is seeking a court order to force the parent company, Old Mutual East Africa Holdings, to either buy out his shares at a premium or initiate the winding up of the insurance entity, allowing him to liquidate his stake.

Kibe’s grievances stem from Old Mutual’s failure to list UAP’s shares on the NSE within the promised two-year period, which would have provided investors, including Kibe, an exit strategy.

He also raised concerns over Old Mutual’s issuance of preference shares, which he claims diluted minority shareholders’ interests by almost 40%.

Additionally, Kibe has objected to Old Mutual’s actions, including acquiring loans without consulting minority shareholders and disposing of assets without proper disclosure.

Joe Wanjui and Wainaina Kenyanjui’s Opposition to Unilever

Joe Wanjui and Wainaina Kenyanjui, minority shareholders in Limuru Tea, mounted a successful opposition to Unilever’s attempt to sell its majority stake in the company to American investment firm CVC Capital Partners.

Their opposition led to regulatory authorities blocking the transaction.

Kenyanjui, owner of Africa Reit, also sought representation on the board of Limuru Tea, citing governance concerns.

He, along with Wanjui, argued in court that Unilever was managing Limuru Tea as a mere subsidiary, appointing itself as the exclusive agent, purchaser, and marketer of all the tea produced by the company.

Kenyanjui, representing Wanjui while he was in the U.S., aimed to secure a board position to address these governance issues and ensure greater transparency in the company’s operations.