Judge orders CMC cases to be heard separately
Posted Monday, April 23 2012 at 19:52
Court cases involving CMC Motors will be heard and determined separately, a judge ruled on Monday.
Suits in the Commercial Court will be handled by Mr Justice Daniel Musinga, but the contempt of court proceedings case filed by ousted CMC chairman Peter Muthoka will be heard in the Constitutional and Human Rights Division.
Mr Justice Musinga declined to merge the multiple suits, saying they required to be handled separately because of their nature.
An application by Mr Muthoka seeking reinstatement in the motor dealer’s board of directors will be heard on May 4.
The judge directed the lawyers to file submissions. CMC lawyer Kamau Karori had last week urged Mr Justice Musinga to consolidate several pending applications in various divisions of the High Court to be heard and determined by one judge.
Mr Muthoka’s contempt of court case against the capital markets regulator will be heard by Mr Justice Isaac Lenaola.
He wants the court to punish CMA chairman Kung’u Gatabaki for allegedly instigating his removal from the company’s board.
Through his lawyer, Fred Ojiambo, Mr Muthoka argues that CMA lacked statutory mandate to nominate directors in the absence of the shareholders.
“There was no vacuum within the board of directors to allow the regulator to bring in its own nominees “through the back door,” said Mr Ojiambo when he submitted on behalf Mr Muthoka, the single largest shareholder of CMC.
Mr Muthoka and a co-director in logistics firm Andy Forwarders, Joseph Kivai, were replaced by three CMA nominees, Zehrabanu Janmohammed, Joshua Okumbe, and Susan Wakhungu.
He wants the court to declaret the appointments null and void and take action against Mr Gatabaki and six CMC directors - Joel Kibe, Paul Ndung’u, Ashok Shah, Charles Njonjo, Andrew Hamilton and the company’s chief executive, Mr Bill Lay.
Mr Ojiambo has urged the court to hold that CMA disregarded the law and presided over an illegality by purporting to dismantle the CMC board that was duly elected by shareholders as required by the Companies Act.
“Removal of directors is a function of the company and not the board of directors and so the contempt comes out of impunity with or without a court order,” says Mr Ojiambo.
Lady Justice Mumbi Ngugi had late last year granted the CMA’s prayer that the CMC board be preserved until a case Mr Muthoka had filed in court against the regulator is heard and determined.