Court gags faction of wrangling Directline shareholders over shares sale

The High Court has issued fresh orders gagging a section of shareholders of Directline Assurance from publishing information related to the business in the latest fiasco surrounding the ownership of the insurer.

Lady Justice Janet Mulwa issued the orders on Wednesday, following claims by the insurer that part of the ownership of the business had published information warning the public against buying shares in the entity.

In a case before the court, Directline Assurance, arguably the largest provider of insurance services for public service vehicles (PSVs), claims that on July 18, 2025, Samuel Macharia Kamau and his affiliated businesses, who are minority shareholders, published a report warning the public against purchasing shares in the entity.

They claimed that Royal Credit Ltd is the largest and majority shareholder of Directline Assurance and that the insurer's management had secretly decided to sell 90 per cent of its shares.

"The sale of the plaintiff's shares is part of a corrupt and fraudulent scheme designed to defraud the public of its money," said the shareholders in court papers.

"Unless restrained by this court, the 1st defendant will continue to broadcast or publish and the 2nd, 3rd and 4th defendants will continue to cause to be broadcast and published damaging content that is defamatory, false and malicious to the plaintiff."

The gag order remains in force until the case is heard in October.

"That due to the upcoming court recess effective from August 1, 2025 to September 16, 2025, the said temporary injunctive orders issued against the Defendants shall remain in force up to September 25, 2025, when an inter partes hearing is scheduled," ruled Justice Mulwa.

Similar orders had been issued in January. Sometime last year, the Insurance Regulatory Authority had to step in when Royal Credit announced that the insurer planned to cease operations.

The affidavit supporting the case by Kenneth Maina Ndura notes that there is an ongoing dispute over control and ownership of the insurance business, which was referred to arbitration.

"There is a pending application to set aside the arbitral award published May 11, 2022 and another to enforce the award as a decree," reads the affidavit.

Directline Assurance argues that these wrangles have caused a drop in their PSV market share from 61.56 per cent in 2023 to 47.97 per cent in 2024.