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Nigerian firm battles to reclaim Nairobi’s Nu Metro cinemas

A Nu Metro hall. Photo/ANTHONY OMUYA
A Nu Metro hall. Photo/ANTHONY OMUYA 

The quest by Nigerian investors to get a firm grip on Nairobi’s Silverbird Cinemas has sparked a vicious boardroom battle, which has now spilled over to the courts, casting dark clouds over the operations of Kenya’s largest big screen firm.

Silverbird Cinemas Nigeria, a shareholder in the Kenyan unit, has moved to court in Mauritius seeking $3.4 million (Sh272 million) from its Kenyan partners and withdrawal of its brand name from the local market on the grounds that the minority shareholders have blocked it from the board and running of the firm.

It claims that the local partners it had used to enter the Kenyan market in 2009 through the acquisition of South Africa’s Nu Metro—which had four state-of-the-art cineplexes and two media stores in Kenya—have refused to recognise them as shareholders in Silverbird Kenya, according to court documents seen by the Business Daily.

Silverbird Africa Holdings (SAH) acquired Nu Metro Ltd in March 2009 for $3 million (then Sh225 million) as the Nigerian firm sought to spread its wings to East Africa while assisting to inject fresh capital to the cash-strapped South Africa firm.

The court documents filed by the Nigerian investors indicate that the shareholders of SAH—which was formed in Mauritius in 2008 to help shepherd the deal — are Silverbird Nigeria (50 per cent), Global Media Alliance (20 per cent), Zambian Investors (20 per cent) and Antony Ward (10 per cent).

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“Antony through his attorney informed us that despite the arrangement between the parties, we are neither owners nor investors in both the holding company in Mauritius and the business in Kenya and openly declared us as creditors,” say the court documents filed at the Mauritius Courts.

“And that all the Kenyan businesses are owned by the company in Mauritius to which Antony and Gordon Grail, are the sole directors and shareholders.”

The tussle has sparked a fight that not only promises to unveil the company’s jealously guarded secrets—including its real owners—but will put another blot in Kenya’s entertainment market that has in recent years witnesses the collapse of cinema firms such as Kenya Cinema, Odeon Cinema, Globe Cinema on reduced viewership.

The bleak market outlook has been attributed to piracy and falling prices of entertainment gadgets that denied movie houses revenues, but Silverbird Kenya has weathered the onslaught by releasing latest movies that remained the bait of Kenya’s middle class.

The Silverbird empire comprised four state-of-the-art cineplexes at the Village Market, Prestige Plaza, The Junction and Megacity, Kisumu, as well as two media stores that sell books, music, Apple computing and film entertainment products.

Mr Ward refused to comment on this story. “Mr Ward has no comment on the story and is very busy right now,” said Lynette Rattos, his personal assistant.

The dealings between Mr Ward and Silverbird Nigeria begun in mid 2008 when he approached the Nigerian entertainment firm with a proposal to acquire Nu Metro assets, which was struggling with low capital.

The Nigerians agreed to the deal including using their brand given that they were the majority shareholder and mandated Mr Ward to lead the negotiations with Nu Metro, which happened to be his former employer.

“Antony advised on the urgency of the acquisition to which a sum of $3 million was provided by Silverbird with the agreement that shares and three seats on the board will would be received in return,” says the court documents.

The other partners including Ghana’s Global Media Alliance and the Zambians were to pay for their shares once the deal was closed including interest to the Nigerians.

But this never happened, forcing the Global Media Alliance and the Zambians to bolt from the venture leaving Silverbird Nigerian to battle for control of Silverbird Kenya or return of the Sh272 million they had sunk in the venture.

Now, the management and board of the Kenyan business say the money they received from Silverbird Nigeria was a loan and it was meant to be refunded under certain conditions that are yet to be fulfilled.

This is emerging despite a Kenya Gazette notice dated March 6, 2009 saying Nu Metro Limited had been dissolved, and the South Africa firm announcing that they had handed over their interests in big screen cinema, music and bookstores to Nigeria’s Silverbird Group.

“Nigeria thought it was dealing with a trustworthy business partner at the time…Nigeria has never been involved in the operation and/or management of this company yet it was the financial backbone to the company,” says Silverbird Nigeria. “We were openly declared as creditors by the owners and operators of the Kenya business.”

The Silverbird Nigeria has already put notices in Kenya’s press, arguing that it has no association with any Kenyan entity — read Silverbird Kenya — a signal that it’s not keen on the firm but wants a refund of the money it alleges to have invested in the Kenyan firm.

“That for avoidance of any doubt Silverbird Cinema’s Ltd (Nigeria) has no relationship with any company registered in Kenya under similar names,” read the notice that appeared in the Business Daily on January 24. “Any deceptive and unlawful use of its trade name and mark in any jurisdiction is therefore illegal and unlawful.”

Its lawyer in Nigeria, Adefunke Adeyeye, told the Business Daily said it needs its money back.

“We want fairness and that we paid for a company and we should be recognised as the rightful owners or Antony Ward and Gordon Trail should pay is back,” said Mr Adeyeye, adding that Silverbird has so far invested $3.4 million (Sh272 million).

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