Court stops insurer from selling assets

The High Court has issued orders temporarily stopping the current management of Old Mutual PLC from selling its assets.

This is after a petitioner who is also a shareholder in the insurance company moved to court challenging it’s decision.

On July, Old Mutual Holdings Plc sold its Tanzanian subsidiary, UAP Insurance Tanzania, for Sh73.5 million.

“In the interim, orders in terms of prayer 2 are granted…,” reads the order by Justice J.W.W Mongare.

In the case, the petitioner Joel Kamau Kibe claims that Old Mutual was listed by the Capital Market Authority in November 2012 after a public offer. It is his argument that the directors and key shareholders of Old Mutual started disposing their shares and leaving the company.

He adds that In January 2015, one of the key investors in the UAP Holdings Christ Kirubi was allowed by the company to make a direct sale of his 20,262,808 shares being 9.58% of the issued ordinary shares to the company for Sh3.2 billion.

He argues that together with other minority shareholders, they have been systematically excluded from participating in the management and decision-making processes of the company.

“Majority shareholders have denied him and other minority shareholders access to crucial company records, including financial statements, minutes of board meetings, and other documents”, he states in court documents.

Kibe argues that the lack of transparency contravenes section 779 of the Companies Act 2015, which entitles shareholders to inspect company records and be kept informed about the company’s affairs.

“It is therefore evident that the affairs of Old Mutual  PLC herein are being conducted in a manner oppressive to some part of its members including the petitioner,” he argues.

He claims that the company is not making a profit because of misappropriation of funds and insider trading fraud adding that UAP Holdings PLC’s rebranding to Old Mutual Holdings PLC  completely lost its Corporate Identity