Family matters: When business is caught between husband and wife

When Sue and Pete Muraya got into a deal with Dr and Mrs Gatabaki to form Muga Developers, they released the formerly coffee estate’s latent commercial value and pushed all players into the big money league.

Just as it is in our Grand Coalition Government, all was well so long as it was 50:50.

According to the court documents (filed by Mrs Gatabaki) everything changed when the partnership arrangements were reportedly altered resulting in new partners, dilution of the Gatabakis’ share in the firm and the fact that the venture had taken on debt without her knowledge or consent.

Whatever happened in the background between the partners, Suraya, the company that the Murayas own, is now caught in an uncomfortable position between the hammer and the anvil of marital relationships.

Mrs Gatabaki is angry and has taken legal recourse. Strangely, it’s against her husband and their joint business partners.

There is nothing in the court documents to indicate that she is estranged from her husband.

For now this remains a purely — albeit surreal — commercial dispute.

Whoever enters a business agreement, especially if it involves the highly emotive issue of land, must consider all the people with an interest in the property, even though they appear to be peripheral players.

These individuals, such as wives or children, may look unsophisticated, uneducated and under the spell or control of the principal negotiator, giving the impression that they will dutifully follow whatever their leader says.

This may be true to the extent that the deal involves relatively insignificant amounts of money or has limited material impact on their lives.

It is wise to remember at this stage that no figure is too low to be insignificant. Cases of people being killed over Sh20 debt are not unheard of.

While the Muga Developers deal released the 200-acre coffee estate’s vast commercial value, it also increased in equal measure the family’s expectations of their share of the resulting development.

Even if they did, it is unlikely that they imagined that they would be dealing with figures between Sh20 billion and Sh30 billion.

This is obvious from their lack of preparation to deal with this scenario. Money, as it is wont to do, changes everything.

What may have started out as a peaceful venture between friends now threatens to turn ugly.

There is potential for the situation to deteriorate, which could lead to loss of investor confidence, strained relationships, which in the worst case may result in the collapse of family units.

What is most likely to have happened is that the men took it upon themselves to discuss the new venture and, in their wisdom, did what they deemed best for the project by involving partners with expertise or resources they did not have.

Since they believed that they were acting in the best interest of the project and shareholders, they may or may not have shared the details with their spouses. Now one spouse has discovered that the deal has morphed into something unrecognisable.

There are new players who she has never met who seem to have acquired equity for very low prices.

She may not say it out loud but she feels that her husband has been bamboozled, if you like. She is trying to save the family from the deal.

But there is an opportunity to reverse the downward spiral — deal with the issues at hand and reinvigorate the project.

The first onus falls on the Murayas and Dr Gatabaki. Resolve the problem. Mrs Gatabaki is not being irrational.

If they were confronted with the facts as they appear to her, they would come to the same conclusion.

Reintroduce her to the facts as they are now and explain the decisions taken. She may accept or reject your proposals.
The second one is on Mrs Gatabaki.

Should Suraya and your husband approach you with an explanation, actively listen to them with the intention of understanding their train of thought and more importantly, understanding your husband in this particular scenario.

All new knowledge you gain will serve both of you well in the future.

The third responsibility falls on Dr Gatabaki and all male family business owners. Listen to your wife.

She is a life partner with a contractual commitment to do you good so long as you live. She is seeing things from a different perspective.

Engage her in your dealings to save you from trouble (and lawsuits such as this).

You may not agree with her, but you must acknowledge her contribution and take it into account as you make a decision.

If the above steps are taken, this situation can be resolved and lead to many good relationships.