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Kakuzi directors escalate fight with markets regulator over probe plans
Kakuzi PLC Managing Director Christopher Flowers appears before the National Assembly Public Petitions Committee at Continental House in Nairobi on February 25, 2026.
Eight directors of agricultural firm Kakuzi Ltd have filed an urgent application to block the capital markets regulator from summoning them over alleged conflict of interest and financial impropriety.
In an application to the Court of Appeal, the directors, led by Kakuzu Chief Executive Christopher Flowers, want the inquiry stopped, pending the hearing of an appeal they have filed.
The directors said they were apprehensive that the Capital Markets Authority (CMA) would proceed and issue a summons to show cause, as directed by the High Court in September last year.
In the judgment, the High Court directed the CMA to expedite the inquiry. The directors’ application to suspend the decision was later dismissed by the court, triggering an escalation of the fight to the Court of Appeal.
Mr Flowers said in an affidavit that they were granted a temporary stay, which will lapse on March 26.
Further, he pointed out that the Capital Markets Appeals Tribunal lacks a quorum under Section 35A (14) of the Capital Markets Act, and the directors cannot, therefore, seek any stay orders before it. The chairman of the tribunal, Paul Lilan, was recently appointed a judge of the Court of Appeal.
“Unless an order of stay is granted by the court, it would pave the way for the hearing of the notices to show cause, despite the pending appeal,” said Mr Flowers.
Other directors facing the investigations are Nicholas Ng’ang’a, Graham Mclean, Andrew Njoroge, Ketan Rameshchandra, Daniel Ndonye, Stephen Waruhiu, and John Kimani.
The notices to show cause were issued by the regulator on June 14, 2021, and September 1, 2022.
The eight directors have challenged the inquiry, arguing that the entire process was not fair and did not meet the constitutional requirements of the right to a fair hearing.
Mr Flowers said Kakuzi has submitted as much information as possible to CMA, but has, in return, not received specific responses from the regulator. He added that to date, CMA has never informed them of the reasons why it has not provided the information they have requested.
They also argued that the High Court failed to uphold their constitutional right to a fair hearing, and in particular, the refusal or failure to disclose the particulars of the alleged financial impropriety.
They said the failure to disclose the complaints received from third parties and the failure to give reasons as to why they considered their documents submitted during the inquiry as insufficient, was erroneous.
They have also submitted that the court made an error in finding that they did not prove any infractions of their rights and fundamental rights.
They further submitted that they were within their constitutional rights to not only request information concerning the allegations raised against them, but also the evidence and materials relied upon by the CMA.
“The appellants are reasonably apprehensive that unless the orders sought herein are granted, the respondent (CMA) will proceed with the inquiry which will further occasion great injustice to the appellants and would render the intended appeal nugatory,” the directors said in the application.
The regulator said in its filings that it had sufficient cause to conduct the investigation, which centered on Management and Operational Services Agreements signed between Robertson Bois Dickson Anderson Limited and Kakuzi on December 11, 2017, as well as the Management and Operational Services Agreements signed between Eastern Produce Regional Services Limited and the agricultural firm.
The regulator also said it intended to probe business dealings and agreements with related companies, including Robertson Bois Dickson Anderson Limited, Eastern Produce Kenya Limited, EPK Empowerment Company (Kenya) Limited, Lintak Enterprises (K) Limited, Linton Park (Kenya) Limited, and Siret Tea Limited.
But Kakuzi Ltd maintained that the claims are normal payments made by the company, as all third-party transactions are approved by the board and declared in the notes to the audited financial statements.
