High Court suspends REA Vipingo takeover process

By James Anyanzwa

The High Court has suspended the proposed takeover of the agricultural firm REA Vipingo Plantations Ltd (RVPL), pending investigations into allegations of irregularities, which have marred the entire process.

Justice Weldon Korir yesterday stopped the Capital Markets Authority (CMA) from proceeding with the takeover process until the matter is heard and determined on April 16.

Korir issued the orders following an urgent application to stop the process by one of the bidders, Vania Investment Pool (VIP) Ltd, whose amended offer of Sh80 per share was rejected by CMA on the grounds that the set deadline of February 28 had expired. According to a statement sent to newsrooms by Vania Investment Pool after the court ruling, the market regulator cannot proceed with the takeover timetable it had released in February until the matter is heard and determined.

“The CMA has this morning been stopped from going ahead with approving bid documents presented to it in connection with the takeover of REA Vipingo Plantations Limited,” the firm said. Justice Korir, according to the statement, said the matters before him were weighty and urgent and directed that the parties to the case be heard before Him on April 16, 2014.

 VIP, through its lawyer Paul Ogunde of Walker Kontos Advocates, said the deadline imposed by CMA on the bidding process denied shareholders an opportunity to derive maximum returns on their investment. Ogunde said CMA acted against its own published takeover regulations.

Ogunde argued that CMA acted contrary to own regulations without reasonable cause and without the approval of the Cabinet Secretary for the National Treasury, which was contrary to the CMA Act.

CMA rejected VIP’s amended offer of Sh80 per share to REA Vipingo Plantation shareholders, prompting the group of investors to go to court on Tuesday April 8 this year.