The High Court has varied an earlier order freezing Old Mutual Holding's bank accounts, allowing the company to pay its suppliers and remit statutory deductions.
Justice Josephine Wayua Wambua Mongare relaxed an earlier decision that had prevented the insurer from trading its assets, incurring new debt, or transferring funds out of Kenya.
“That a temporary injunction restraining the current Board of Directors of Old Mutual Holdings from doing any of the following acts: transferring any funds or any monies or stock out of the jurisdiction of this honourable court to either its shareholders, purported service providers, financiers or any other person and/or changing the ownership structure of the said company and/or making exceptional or unusual amounts in excess of Sh10 million to anyone is varied to allow payments to suppliers and statutory deductions in the interim,” the judge said in her September 23, 2024 decision.
Old Mutual had sought the lifting of the freeze on its accounts, arguing that it prevented payments in excess of Sh10 million, which affected its ability to meet its contractual and statutory obligations, including the payment of taxes and making contributions to the National Health Insurance Fund, the National Social Security Fund, and pension fund.
Old Mutual Holdings is embroiled in a shareholder fight that began after billionaire shareholder Joel Kibe accused the company of trampling on the rights of minority owners. Mr Kibe, who holds 1.54 million shares in Old Mutual, obtained a court order on August 22 that barred the company directors from selling or transferring assets and incurring new debt.
Mr Kibe has sued Old Mutual Holdings seeking to be bought out at a price that is likely to top the Sh1 billion mark, citing several grievances including lack of dividends. Mr Kibe is the sixth largest shareholder in Old Mutual, having bought 1.54 million shares for Sh290.9 million on the over-the-counter market. The shares were bought between July 15, 2014, and June 29, 2015.
He said that the insurer had failed to list on the Nairobi Securities Exchange as promised and had taken huge loans from its parent firm on opaque terms. He also said that the insurance company intends to convert some of the loans into shares in the company, a move that will dilute small investors who have seen negligible returns from the investment.
“The planned listing of the company at the Nairobi bourse within two years of the [public offer] was not undertaken,” Mr Kibe told the High Court in Nairobi.
“The company unilaterally made a decision to postpone the intended listing without reference to the petitioner whose investment of Sh246.6 million is now held up” he added.
While responding to the accusations, Old Mutual, through its chief executive officer Arthur Oginga said the company had the bandwidth to meet its financial obligations.
