By The Weekly Vision Team
Business tycoon Joel Kibe has raised concerns with the Capital Markets Authority (CMA) regarding alleged misconduct by Old Mutual Holdings, calling for the protection of minority shareholders in the publicly listed company. In a letter addressed to CMA Chief Executive Officer Wycliffe Shamiah, Kibe has requested a thorough investigation into these allegations and urged the regulator to take legal action to address the perceived oppression of minority shareholders. Through his lawyer, Peter King’ara, Kibe has also asked the CMA to prevent further dilution of shares through the issuance of preference shares without proper consultation and approval.
“We respectfully request the Capital Markets Authority to provide us with copies of the application and other relevant documents submitted to the CMA before the approval of the takeover, as required by Regulation 5 of the Takeover Regulations,” King’ara stated in the letter dated July 29. Kibe, who is the sixth-largest shareholder in the company, has also filed a separate lawsuit against the insurer, seeking a buyout valued at over Sh1 billion. He acquired 1.54 million shares in the insurer between 2014 and 2015 for Sh290.9 million.
In his urgent lawsuit, certified by the High Court, Kibe argues that the conversion of shareholder loans into equity will unfairly dilute the stakes of smaller investors. Recently, the company reported a net profit of Sh249 million for the half-year period ending June 2024, a significant recovery from the Sh348 million net loss reported in the same period of 2023.
Kibe highlighted that Old Mutual Holdings had announced its intention to acquire control of UAP Holdings Ltd. at Sh180 per share in a notice dated January 26, 2015. This notice acknowledged the need for CMA consent as per Takeovers and Mergers Regulations.
However, Kibe claims that Old Mutual’s subsequent actions were detrimental to minority shareholders, including himself. This includes allegations that Old Mutual failed to list its shares on the Nairobi Securities Exchange (NSE) within the required 24 months following the public offer, contrary to the commitments made in the 2012 prospectus and Regulation 19 of the Capital Markets (Securities) Regulations of 2002.
Kibe’s lawyer contends that these actions also violate Section 31 of the CMA Act and the principles of transparency and accountability outlined in the CMA’s corporate governance code of issuers.
Additionally, the letter accuses Old Mutual of issuing preference shares that diluted minority shareholders’ stakes by nearly 40 per cent without proper disclosure or consultation, further breaching regulatory requirements. The letter also raises concerns about unapproved borrowings undertaken by the company without consulting minority shareholders.
