Ruling on CMC’s case set for next month

The ruling in a contempt of court case facing the Capital Markets Authority chairman Kung’u Gatabaki and six directors of CMC Motors Group will be made on August 2.

Constitutional and Human Rights judge Isaac Lenaola yesterday said in a posting made on the court’s daily cause that due to his engagement in the Judicial Service Commission (JSC), the ruling has been deferred to next month.

The verdict was to be delivered two weeks ago after lawyers acting for the motor dealer, CMA and minority shareholders wound up their submissions on May 18.

Ousted CMC chairman Peter Muthoka wants the court to punish Mr Gatabaki and rival board members Joel Kibe, Paul Ndung’u, Ashok Shah, Charles Njonjo, Andrew Hamilton and chief executive Bill Lay for allegedly breaching a court order.

He is accusing them of initiating his removal and that of co-director Joseph Kivai from the motor dealer’s board without following the right legal procedure.

Mr Kivai is Muthoka’s co-director in Andy Forwarders where the latter is the chief executive. Muthoka claims the markets regulator has no powers under the Companies Act to remove him and Kivai from the CMC board.

Through lawyer Fred Ojiambo, Mr Muthoka submitted that the changes made in the CMC board were in violation of Lady Justice Mumbi Ngugi’s orders of November 16 last year where she had ruled that the board be preserved until the case Mr Muthoka had filed against the regulator had been heard and determined.

Mr Muthoka further told the court that CMA lacked statutory mandate to nominate directors in the absence of the shareholders saying there was no vacuum within the board of directors to allow the regulator to bring in its own nominees.

Mr Muthoka and Mr Kivai were replaced in the board by Zehrabanu Janmohammed, Joshua Okumbe, and Susan Wakhungu. But Mr Muthoka argues that the removal of the board is a function of the company and not the board of directors and has pleaded with the court to declare the appointments null and void.

Mr Muthoka also wants the court to hold that the regulator disregarded the law by presiding over an illegality and purporting to dismantle the CMC board that was duly elected by shareholders as required by the Companies Act.

CMC lawyer Kamau Karori sid Mr Muthoka had no legal standing to prosecute the contempt case because criminal proceedings of that nature fell under the Attorney- General ‘s cchambers. 

He argued Mr Muthoka had no legal capacity to prosecute the case for failure to serve the A-G with a notice prior tothe start of the proceedings and has termed the case as defective and wants it dismissed.