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Tycoon’s dubious share transfers blocked in debt row with ARM Cement
Judge says businessman Peter Mahu Muthee acted deceitfully by transferring 51,000 shares in three businesses he owned, yet the stakes were marked for sale to offset a Sh78,260,331.15 debt owed to ARM Cement Plc.
The High Court has reversed a suspicious transfer of shares in three companies marked for sale to recover a debt owed to fallen ARM Cement Plc by a business tycoon with vast interests in real estate, hotels, and hardware store businesses.
Justice Freda Mugambi said that businessman Peter Mahu Muthee acted deceitfully by transferring 51,000 shares in three businesses he owned, yet the stakes were marked for sale to offset a Sh78,260,331.15 debt owed to the cement firm, which is currently under liquidation.
Records showed that the businessman transferred 600 ordinary shares previously held in Golden Pearl Properties Limited, 50,000 ordinary shares previously held in Giraffe Ark Game Lodge Limited and 500 ordinary shares previously held in Nest Manor Residence and Suites Limited.
“An order is hereby issued, directed to the Registrar of Companies for the reversal of all share transfers undertaken by Peter Mahu Muthee, the 2nd Defendant/Judgment Debtor in the following companies: Golden Pearl Properties Limited, Nest Manor Residence and Suites Limited and Giraffe Ark Game Lodge Limited,” the judge said in a February 7, 2025 decision.
“An order is further hereby issued directed to the Registrar of Companies that the above shares be registered in the name of ARM Cement Plc (in liquidation) to facilitate their sale for the purpose of satisfying the decretal sum of Sh78,260,331.15 together with costs and accruing interest."
The judge said that Mr Muthee’s reversed shares would be handed over to the Receiver Manager at the collapsed cement manufacturer for sale. ARM Cement was placed under administration on August 17, 2018, and later went into liquidation on October 1, 2021.
“The official receiver shall oversee the registration and sale process to ensure transparency and accountability,” Justice Mugambi said.
Giraffe Ark Game Lodge is located in Kieni, Nyeri County, and is popular with business meetings, holiday getaways, and family outings. The Nest Manor Residence is a 25-roomed hotel facility in King’ong’o, Nyeri County. Golden Pearl Properties Limited owns a vast gated real estate venture in Thika, Kiambu County.
The High Court had on May 19, 2022, entered judgment against Mr Muthee and G.M Kariuki Limited for Sh78,260,331.15 in favour of ARM Cement together with interest and costs. G.M Kariuki Limited, a giant chain of hardware shops headquartered in Karatina town and founded by Mr Muthee’s late father, filed a Notice of Appeal and a Memorandum of Appeal. The hardware operator, however, did not file a Record of Appeal or prosecute the appeal.
ARM Cement in its application to the court said that Mr Muthee and G.M Kariuki Limited had failed to pay the amount awarded to it by the court causing interest charges to accrue.
The fallen cement firm also stated that Mr Muthee, a former shareholder in several companies, has hindered execution of the court's decision by transferring shares to third parties. The companies in question are: G.M. Kariuki Hardware Limited, New Age Developers and Construction Company Limited, Anchor Flour Millers Company Limited, Giraffe Ark Game Lodge Limited, Golden Pearl Properties Limited, and Nest Manor Residence and Suites Limited.
ARM Cement further pointed out that Mr Muthee and G.M Kariuki Limited failed to provide the court-ordered security of Sh50 million by the July 3, 2023 deadline.
In response, Mr Muthee claimed that the assets and shares in G.M. Kariuki Hardware Limited and Anchor Flour Millers Company Limited are encumbered by charges to Standard Chartered Bank, with fixed floating charges dated July 6, 2025, and May 27, 2015, respectively.
The businessman said that, similarly, the assets and shares in New Age Developers Limited and Construction Company Limited are charged to the Co-operative Bank of Kenya, with a fixed floating charge dated March 6, 2015.
Consequently, Mr Muthee contended that he holds no shares in these companies due to these charges, making the orders sought in the motion unfeasible. He also maintained that he was not a shareholder in any of the six companies as alleged by the applicant.
Justice Mugambi however dismissed Mr Muthee’s claims of assets charged to the banks and also rejected the share transfers.
“While the 2nd judgement debtor (JD) was within his rights to transfer shares under the Companies Act, the timing of these transfers is highly suspect and raises serious doubts over the intention. The transfers were made despite the 2nd JD’s awareness of the existing decree, his default, and the ongoing execution process to satisfy the decree” the judge said.
“Based on this, I find that the 2nd JD acted in bad faith by transferring his shares in the remaining three companies between 2023 and 2024, deliberately attempting to shield his assets from the execution process,” Justice Mugambi said.
