Court declines to drop Old Mutual buyout dispute

The High Court has declined to strike out a case filed by business mogul Joel Kibe against insurance firm Old Mutual.

Mr Kibe sued the firm’s parent company, Old Mutual East Africa Holdings, in a buyout battle. He claimed that an alleged move to take up loans that would be converted into shareholding would dilute small investors’ investments.

The insurer asked the court to dismiss the case, arguing that Kibe had no powers or authority to sue or pursue the insurer in a liquidation case. According to Old Mutual, Kibe was not a member of the insurer as he was not registered at the time he was filing the case.

Nevertheless, Justice Wayua Mongare said that the issues raised by Old Mutual could only be settled after a full hearing.

“I note that the issues raised by the respondent (Old Mutual) are not pure points of law suitable for determination at this juncture. To my mind, the issue raised, whether the petitioner was or was not a member of the company as at the time of filing the petitioner, requires the court to consider facts and evidence in order to ascertain the true position. This can only be determined after full evaluation of evidential matter and not at a preliminary stage as sought herein by the respondents.

Mongare said that Kibe had filed the case as a minority shareholder. She observed that he had alleged exclusion of minorities by the majority shareholders in decision making.

At the same time, the judge said he claimed dilution of shares, mismanagement and misappropriation of company assets, denial of access to company records, unfair allocation of benefits and fraudulent and unauthorised borrowing.

While denying the claims, Old Mutual argued that although Kibe was a beneficial owner, the court had no powers to entertain the case. It asserted that the case was frivolous, a vex and an abuse of the court process.