A company associated with two shareholders of Savannah Cement has been allowed to participate in an ongoing dispute over the ownership of the troubled firm.
Justice Alfred Mabeya agreed that Savannah Heights Ltd was entitled to be heard in the case as a 40 percent shareholder of the Athi River-based cement manufacturer.
Savannah Heights is associated with Donald Mwaura and John Gachanga.
The two are embroiled in a dispute with businessman Benson Ndeta who acquired Chinese investors’ controlling stake of 60 percent in Savannah Cement. The majority stake is held through the investment vehicle Seruji Limited.
“It is not in dispute that the interested party is a 40 per cent shareholder in the respondent. It is also not disputed that the interested party was not served with the originating summons. That application was heard ex-parte. Surely the interested party was entitled to be heard in that application,” the Judge said.
The fight for the control of the cement firm was triggered by the purchase of a stake in the company, which was initially held by Chinese investors, by Mr Ndeta for Sh1.5 billion and transferred to Seruji. Mr Mwaura and Gachanga challenged the move as illegal.
The company was formed by a group of Kenyan and Chinese investors. The Kenyan shareholders came under Savannah Heights which is owned by Mr Mwaura (30 per cent), Mr Gachanga (35 percent) and Mr Ndeta (35 per cent).
The Chinese invested in the company through two companies.
The Kenyan partners later fell out after it emerged that Mr Ndeta bought off the Chinese and transferred their shares to Seruji, a move that was approved by Competition Authority of Kenya.
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