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Munga’s wife blocks auction of Sh640m Britam shares
Businessman Peter Munga. Ms Njambi also filed an application challenging the planned auction, contending that the bank had proceeded with full knowledge of her beneficial interest in ownership.
The High Court has handed businessman Peter Munga a reprieve after stopping a bank from auctioning his 75 million shares in Britam Insurance.
The injunction came after his wife, Rose Njambi, objected to the planned sale, arguing that the shares constitute matrimonial property and cannot be disposed of without her consent.
In a decision that offers immediate relief to the billionaire co-founder of Equity Bank, the Commercial Division Court froze the sale of the shares – valued at approximately Sh649 million – pending the determination of a suit where Ms Njambi claims half the stock as jointly acquired marital property.
The court found that Ms Njambi proved an arguable case that her husband unlawfully pledged matrimonial property to secure the contested loans without her knowledge or consent.
The ruling halts African Banking Corporation (ABC Bank)’s planned auction of the shares, which were pledged as collateral for loans advanced to Mr Munga.
The suit has drawn a sharp reaction from ABC Bank’s lawyers, who have accused Mr Munga of using the courts to frustrate a lawful recovery process.
The freeze order, which highlights a spouse’s veto power over loans secured with joint assets, will remain in force pending determination on whether the shares are matrimonial property.
The bank had in September 2024 declared the businessman in default of Sh274 million and $1.23 million (Sh159 million) loans, totalling Sh433 million, in unpaid debt.
In the suit, Mr Munga’s wife claims that ABC Bank took part of the shares as collateral without her approval and when he defaulted repayment, it issued a demand notice dated September 24, 2024 seeking payment of Sh433 million, failing which the pledged shares would be sold.
Ms Njambi also filed an application challenging the planned auction, contending that the bank had proceeded with full knowledge of her beneficial interest in ownership.
She informed the court that Mr Munga was her husband, and that during the subsistence of their marriage, they jointly acquired 75 million shares in Britam Insurance Company Limited.
Of these, 25 million shares were registered in her name, while 50 million were registered in Mr Munga's name. She contended that both constituted matrimonial property within the meaning of Section 6(1)(a) of the Matrimonial Property Act.
She told the court that though only 50 million shares had been used by Mr Munga to secure the credit facility, the bank was threatening to auction the entire 75 million shares, a move that would deprive her of the only substantial matrimonial asset.
"Without this injunction, I will lose our family’s only substantial asset," Ms Njambi argued in court filings. She offered Sh100 million as security, a condition the court accepted.
ABC Bank had opposed the application, dismissing the case as a "sham" and alleging Ms Njambi was a proxy helping her husband delay repayment.
The bank’s legal manager argued that the application was made in bad faith and that it formed part of a series of vexatious and frivolous suits instituted to frustrate the lender's legitimate recovery efforts against the businessman.
The bank argued that no marriage certificate was provided to prove the marriage, and that the 50 million shares were solely registered in Mr Munga’s name; hence no evidence of joint ownership or spousal consent existed.
However, the court ruled that the injunction was appropriate in the circumstances and that the bank’s interests were sufficiently protected by Ms Njambi’s Sh100 million security deposit, ordered to be held in a joint advocate account.
The court found that the loss of the shares before the hearing of the suit would occasion irreparable prejudice to Ms Njambi.
"Shares in a listed company may fluctuate in value and, once sold to third parties, cannot easily be recovered. Monetary compensation may not fully vindicate the applicant’s constitutional right to equality in marriage and to property jointly acquired," the court observed in the ruling with far-reaching implications for matrimonial property rights in Kenya.
The ruling reaffirmed Section 12 of the Matrimonial Property Act, which bars spouses from disposing of joint assets without mutual consent.
The court found that this spousal veto power, which saved Mr Munga's fortune, could not be wished away.
Section 6(1)(a) of the Matrimonial Property Act defines matrimonial property to include “the matrimonial home and household goods and effects in the matrimonial home or any other immovable and movable property jointly owned and acquired during the marriage.”
The ruling stalls ABC Bank’s recovery efforts, giving Mr Munga breathing space to renegotiate his debt. The tycoon had filed three failed suits to stop the sale before his wife’s intervention.
The freeze holds until the main suit determines whether the 50 million shares are matrimonial property and if ABC Bank violated spousal consent laws.
