Businessman Joel Kibe has written to Capital Markets Authority (CMA) asking the regulator to protect minority shareholders at Old Mutual Holdings (previously UAP Holdings Ltd.)
Through Gichuki King’ara and Co. Advocates, Kibe alleged continued oppression of minority shareholders at the company.
The letter to CMA Chief Executive Officer Wycliffe Shamiah was copied to the Insurance Regulatory Authority, Retirement Benefits Authority, and Association of Kenya Insurers.
Kibe alleged issuance of preference shares, which diluted the minority shareholders' stake by nearly 40 per cent, was conducted without adequate disclosure or consultation, in breach of Regulation 57 of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002, and Section 35 of the Capital Markets Act.
“This also contravenes the principles of equitable treatment of shareholders under Section 280 of the Companies Act, 2015, and Principle 4 of the Code, which mandates the fair and equitable treatment of all shareholders,” he said.
He further alleges that the company has undertaken significant loans and other borrowings without consulting minority shareholders.
He said lack of transparency in financial management also breaches Section 143 of the Companies Act, 2015, and violates Principle 3 of the Code, which requires the board to ensure the integrity of the company's financial reporting.
Kibe added that failure to ensure the liquidity of shares, as promised in the 2012 prospectus, has severely restricted his ability to sell or transact the shares.
“This contravenes the duty to ensure a fair and orderly market under Section 11(1)(d) of the Capital Markets Act and constitutes a breach of fair responsibility under Section 142 of the Companies Act, 2015,” he said.
Kibe asked CMA to conduct a comprehensive investigation on the matter raised and take all necessary and lawful steps under Sections 11(3)(w) and 34 of the Capital Markets Act to stop the continued oppression of minority shareholders.
He further asked CMA to issue a directive under Regulation 57 The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulation 2002, and Principle 4 of the Code to stop any further dilution of shares through issuance of preference shares without proper consultation and approval.
He also asked CMA to halt any further sale of assets by Old Mutual Holdings Plc without proper disclosure and accounting to shareholders.
