Business tycoon Joel Kibe has written to the Capital Markets Authority (CMA) over alleged breaches by Old Mutual Holdings while calling for the protection of minority shareholders of the public listed company.

In a letter to the CMA Chief Executive Officer Wycliffe Shamiah, Kibe is further asking the capital markets regulator to conduct a comprehensive investigation into the allegations and take necessary and lawful steps to stop alleged continued oppression of minority shareholders.

Through lawyer Peter King’ara, Kibe further wants the capital markets regulator to stop further dilution of shares through the issuance of preference shares without proper consultation and approval.

“In light of the breaches, we respectfully request the Capital Markers Authority to furnish us with copies of the application and other transactional documents submitted to the CMA prior to the approval of the takeover, as per the requirements of Regulation 5 of the Takeover Regulations,” King’ara said in the letter dated July 29.

Sued insurer

Kibe, the sixth largest shareholders in the company has separately sued the insurer and wants to be bought out at a price that is likely to exceed Sh1 billion. The businessman bought 1.54 million shares in the insurer between 2014 and 2015 for Sh290.9 million.

He said in the suit that was certified urgent by the High Court that the shareholder loans, which are set to be converted into equity, will dilute small investors.

The firm recently announced a Sh249 million net profit in the half-year period to June 2024, driven by lower finance costs and a reduced tax burden, marking a significant turnaround from a net loss of Sh348 million it reported in the six months to June 2023.

Kibe pointed out that in notice dated January 26, 2015, Old Mutual Holdings announced its intention to acquire effective control of UAP Holdings Ltd at a price if Sh180 per share.

The notice, the letter added, recognised the need to obtain the consent from the CMA as required Takeovers and Mergers Regulations.

However, the subsequent actions by Old Mutual were highly prejudicial to the minority shareholders, including himself because of various reasons including the alleged failure to list in the Nairobi Securities Exchange (NSE) within 24 months following the public offer.

He said despite the representation made in the 2012 prospectus, Old Mutual failed to list its shares on the NSE, within the period stated by the Regulations 19 of the Capital Markets (securities) Regulations of 2002.

The lawyer said this was also in breach of Section 31 of the CMA and the principles of transparency and accountability set in the CMA’s corporate governance code of issuers.

Kibe added that the issuance of preference shares, which diluted the minority shareholders’ stake by nearly 40 percent was conducted without adequate disclosure or consultation in breach of the regulations.

The letter also lists unapproved borrowings, which the company has allegedly undertaken without consulting the minority shareholders.