Kenneth Kareithi was forced out in February in a boardroom shake-up that later saw the departure of the company’s finance director.
Investment firm Olympia faces a multi-million-shilling claim from former CEO Kenneth Kareithi who was forced out in February ahead of the departure of finance director David Kabeberi.
Mr Kabeberi resigned on April 3. The duo’s exit marks the latest changes to the company’s boardroom which kicked off in September 2012 with the resignation of major shareholder Paul Ndung’u.
Sources at Olympia told the Business Daily that the firm’s board disagreed with Mr Kareithi on strategy, leading to his acrimonious departure.
The former CEO, who replaced Michael Matu in September 2012, is now seeking compensation from the investment firm.
“The board was not happy with the direction Mr Kareithi was taking the company and that’s why he left,” our well-placed source said.
“He is claiming an equivalent of an annual salary from Olympia and the matter is before court,” the source said, adding that the hunt for Mr Kareithi’s replacement had started.
Mr Kareithi, who has previously worked for blue chip companies BAT Kenya and Nation Media Group, had been tapped from Olympia’s subsidiary Mather+Platt which sells fire protection equipment.
It was not clear why Mr Kabeberi left the investment firm, with the former finance director declining to discuss the reasons.
Mr Kareithi confirmed that he has sued the company at the Industrial Court but declined to disclose the basis and value of his claim, referring the Business Daily to the lawsuit papers.
Their departure has left Christopher Obura, Michael Matu, Suresh Lakhani, John Simba and Vincent Opanga as directors of the Nairobi Securities Exchange-listed firm.
Sources familiar with Olympia’s strategy say the latest shakeups are attempts to boost the company’s performance after years of below par results that have disappointed shareholders.
The investment firm’s net profit dropped 67.4 per cent in the year ended February 2013 compared to Sh24.2 million the year before.
This came as sales rose 6.5 per cent to Sh824.9 million with cost of sales increasing at a faster rate of Sh12.7 per cent to Sh592.1 million. The performance saw the company fail to declare a dividend. It had paid Sh0.1 per share the year before.
Olympia’s share price has dropped 16.3 per cent over the past six months to trade at Sh4, recording the worst performance among investment firms.
Unlike peers Britam, Centum and Transcentury, Olympia has stayed for more than seven years without making a significant acquisition and has struggled with its current investment portfolio.
It deals in real estate, fire prevention equipment, and manufacture of products used in the construction industry including floor tiles and door frames. The firm has subsidiaries in Botswana and South Africa and its Nairobi-based units sell the products in the local and regional market.
In 2012, the company said it was looking for expansion opportunities in South Sudan, specifically in real estate and building materials. Olympia is a tightly held company, with its directors controlling significant stakes.
The Matu Wamae family, which acquired shares in the 1990s, is believed to hold the largest bloc of shares in the company where their interests are represented by Michael Matu who was appointed deputy chairman after stepping down as CEO.
Mr Ndung’u is the single largest individual investor with an 11.53 per cent stake. Dr Obura, the chairman, is third with a 9.83 per cent equity through his investment vehicle Karen Enterprises.
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