UAP Old Mutual Tower, a 33-storey office complex in Upper Hill, Nairobi. Inset is tycoon Joel Kibe.
Old Mutual Plc has been allowed to sell UAP Old Mutual Tower, one of Kenya’s tallest buildings, on condition that it sets aside Sh500 million in the event tycoon Joel Kibe wins his court battle against the insurance firm.
Justice Josephine Mong’are issued the orders after agreeing with Old Mutual that the firm is in distress and urgently needs money to keep its operations running, but also that Mr Kibe’s rights need to be preserved in the event that his case is successful.
Old Mutual disclosed in court that it intends to sell the 163-metre building for Sh5.5 billion and use the proceeds to offset loans and other obligations.
Mr Kibe has filed a petition seeking to have Old Mutual buy his 1.544 million shares at the same price he acquired them for over 10 years ago, together with interest of 18 percent per year on the same. That pushes his claim to nearly Sh700 million.
In the alternative, Mr Kibe wants the court to order that Old Mutual be placed under administration.
The High Court had blocked Old Mutual from selling the building in 2024 following Mr Kibe’s suit.
Balance both interests
Justice Mong’are allowed the sale, with the Sh500 million rider, in an attempt to balance the interests of both parties.
The Sh500 million is to be deposited in an escrow account to be registered in the names of advocates representing the two parties in court.
“Having heard the arguments by the applicant and the respondent’s reply, I find that the applicant has established that he stands to suffer financial loss of a substantive amount if the assets of the company are disposed of at this stage. I am, however, satisfied that the loss likely to be suffered is one that can be compensated by an award of damages,” Justice Mong’are said in her ruling.
“The interim orders issued by the court at the ex parte stage are vacated and discharged...the respondent's applications dated 5th September 2024 and 22nd January 2025 are partly allowed with the respondent being allowed to proceed with intended disposal of LR No. 209/13453 UAP Tower, Upper Hill Road, on condition that a sum Sh500 million from the sale proceeds is held in an escrow account,” the judge held.
Mismanagement claims
Fireworks light up Nairobi's night sky over UAP Old Mutual Tower during the New Year’s celebrations on January 1, 2024.
Mr Kibe in his petition claims that Old Mutual has defrauded him of the investment he made between 2014 and 2015, as the firm has allegedly been mismanaged to a point that it has lost its corporate identity.
He further claims that Old Mutual has, without proper reason, sold off several assets.
The tycoon is seeking a declaration that Old Mutual directors have been conducting its affairs in a manner oppressive to him.
He also wants the court to issue an order directing the taking of accounts, and that an investigation of Old Mutual be done by an inspector appointed by the court.
Targets other assets
Equity Centre in Upper Hill, Nairobi.
Other assets Mr Kibe wanted the court to freeze pending determination of his suit are Equity Centre along Hospital road, Union House along Ragati road and Orange House along Ralph Bunche road.
But Old Mutual in court denied owning Orange House and Union House, hence Justice Mong’are declined to issue freeze orders against the two prime developments.
Mr Kibe also wanted the court to block a proposed sale of Old Mutual’s Tanzanian arm, and to stop the firm from borrowing loans.
Further, he asked that Old Mutual be stopped from transferring money or stocks outside the court’s jurisdiction, whether to shareholders or service providers, changing the company’s ownership structure.
Mr Kibe has claimed that Old Mutual’s minority shareholders like him have been excluded in decision making.
The tycoon reveals that Old Mutual has offered to convert a $48,183,511 (Sh6.2 billion) debt owed to a shareholder into more shares. In that offer, the shareholder is to extend a further loan of Sh1,927 billion.
Old Mutual in its response states that Mr Kibe bought his shares over 32 months after the deadline for members of the public to buy shares directly from the company.
Mr Kibe, Old Mutual adds, bought his shares over the counter from other shareholders at over three times the cost the firm had sold to investors in 2012.
In that argument, Old Mutual says it cannot be compelled to match the price Mr Kibe acquired his stake for as the company prospectus provided for Sh60 per share.
The firm denies that the exit of some initial shareholders from UAP Insurance, and the entry of Old Mutual, was above board, and that Mr Kibe cannot bring allegations of irregularity in transactions done nine years ago.
Old Mutual bought a majority stake in UAP Insurance in 2015, with the transaction sparking a fallout with some minority shareholders like Ngugi Kiuna and Mr Kibe.
Mr Kibe claims in his suit that Old Mutual has engineered restrictions in trading of its shares after buying out the anchor shareholders.
But the firm argues that Mr Kibe also purchased a further stake after the exit of some initial shareholders.
bwasuna@ke.nationmedia.com
