Rea Vipingo shareholders will have to wait for a case filed before the Capital Markets Tribunal to be determined before they can pick their preferred offer in the impending buyout of the company.
High Court judge Weldon Korir Thursday allowed an application by Centum, seeking to block the takeover of the Nairobi Securities Exchange-listed Rea Vipingo in the interest of justice.
Centum move to court on May 21 seeking orders suspending the takeover to allow time for the hearing and determination of a case it has filed before the tribunal seeking to quash an offer by two British brothers, who are majority shareholders of the sisal plantations firm.
The Capital Markets Authority (CMA) had earlier set a timetable that anticipated completion of the Rea Vipingo takeover by end of June.
Justice Korir said CMA had continued with the takeover process even after the appeal had been filed, which he said is in contravention of clear provision of the law.
He noted that although it is in the interest of the shareholders and the bidders that the takeover process be completed within the statutory timeframe, the process should have been put on hold once an appeal was lodged.
The judge also declined to make any conclusive decision on the position taken by CMA and REA Trading Limited, which claimed the tribunal has no jurisdiction over the matter.
The judge said the issue should be raised before the tribunal, noting that from the reading of the law he believed the tribunal had jurisdiction.
Centum is opposed to CMA’s approval of the revised offer by REA Trading Limited arguing that the offer is dependent on the sale of Rea Vipingo’s property, which it claimed was not allowed in law.
Two other Rea Vipingo shareholders also objected in letters to the CMA, criticising the offer.