Business tycoon Joel Kibe has sent a letter to the Capital Markets Authority (CMA) regarding alleged violations by Old Mutual Holdings, urging the protection of minority shareholders in the publicly listed company. In his letter to CMA CEO Wycliffe Shamiah, Kibe requests a thorough investigation into these allegations and calls for the regulator to take appropriate and legal measures to halt the purported ongoing mistreatment of minority shareholders. Additionally, through his lawyer Peter King’ara, Kibe has asked the CMA to prevent further dilution of shares through the issuance of preference shares without adequate consultation and approval.
“In light of the breaches, we respectfully request the Capital Markers Authority to furnish us with copies of the application and other transactional documents submitted to the CMA prior to the approval of the takeover, as per the requirements of Regulation 5 of the Takeover Regulations,” King’ara said in the letter dated July 29.
Joel Kibe, the sixth largest shareholder in Old Mutual Holdings, has filed a lawsuit against the insurer, seeking a buyout that could exceed Sh1 billion. Kibe acquired 1.54 million shares in the company between 2014 and 2015 for Sh290.9 million.
In his urgent High Court suit, Kibe argues that the conversion of shareholder loans into equity will dilute the holdings of smaller investors. Recently, Old Mutual reported a Sh249 million net profit for the half-year ending June 2024, a significant recovery from a net loss of Sh348 million during the same period in 2023.
Kibe highlighted that Old Mutual, in a notice dated January 26, 2015, announced its plan to acquire UAP Holdings Ltd at Sh180 per share and recognized the need for CMA approval as per the Takeovers and Mergers Regulations. However, he contends that subsequent actions by Old Mutual were detrimental to minority shareholders like himself, citing issues such as the company’s failure to list on the Nairobi Securities Exchange (NSE) within the required 24 months following the public offer.
He claims that Old Mutual’s actions violated the 2012 prospectus terms, the Capital Markets (Securities) Regulations of 2002, and Section 31 of the CMA, which mandates transparency and accountability. Additionally, Kibe asserts that the issuance of preference shares, which diluted minority shareholders’ stakes by nearly 40 percent, was done without proper disclosure or consultation, breaching regulations. The letter also mentions unapproved borrowings by the company, undertaken without minority shareholder consultation.
