Former President Mwai Kibaki and seven other directors have regained control of a multi-million property and company they started in 1970s.
Kibaki’s team lost a bid to retain management of Mathingira Wholesalers Company Ltd in 2016 after the Nyeri Environment and Lands Court ruled that a new set of directors who had taken over the firm were legitimate.
‘ERRONEOUS’
The decision by Lady Justice Lucy Waithaka dated July 12, 2016, forced the former Head of State to move to the Court of Appeal, which Wednesday overturned the judgement and termed it erroneous.
Judges Agnes Murgor, Fatuma Sichale and Sankale Ole Kantai found that the lower court allowed ‘strangers and imposters’ to manage the property without authority of the original owners.
“We are satisfied the court adopted the wrong position. The suit property belongs to the list of proprietors declared by a certificate of lease issued in 1976 and renewed in 2012,” said the judges.
The judges also said the lands court decision had set a dangerous precedence on issues of governing properties and transferring of shares.
The court found that Mr Kibaki and his seven colleagues bought the 0.0697 hectares of land situated in Nyeri town in 1976 and incorporated it as Mathingira Wholesalers Limited in 1983.
Further, the appellate court said the original owners also became the directors of the company and they have never transferred their shares in accordance with Company Articles and Memorandum of Association.
‘ORIGINAL OWNERS’
“The new members who acquired the shares later were not aware of the procedures. They did not acquire rights as the suit property was not passed from the original owners,” said the judges.
The court heard that the original founders of the company are dead and only Mr Kibaki and Mr Kanyungu, who is a former councillor, are alive.
The dispute about the property started following a disagreement on its management after a new chairman was elected into office in October 2007 replacing Mr Kanyungu.
It emerged that the shareholding of the company had changed due to transfer and sale of shares by some of the initial proprietors of the company and inheritance of those who had died.
Some of the shareholders ceased to be shareholders and were replaced by other persons.
Mr Kibaki’s brother, Samuel Githinji, was among those who had sold their shares.
While faulting the lands court judgement, Mr Kibaki had termed the set of directors controlling the property as ‘court imposed trusts’ since they had also been allowed to access the company’s bank accounts.
SHARES SOLD
“It is difficult to understand what the lands court had in mind while giving them rights to manage and control the property in total disregard of the law,” said Mr Kibaki in his appeal.
Mr Kibaki, who appeared in court on December 13, 2013 during hearing, testified that he was not aware that some of the original members had sold their shares.
He said that some people had taken over the firm and withheld rent proceeds.
Mr Kibaki’s lawyer, Senior Counsel Kamau Kuria welcomed the appellate court decision saying prospective property owners must adhere to the law and procedures.
“Kibaki did not use his position in the country to fight the imposters. He has stuck to the rule of law even when he lost control of the property,” said the lawyer.
The case had been in the judicial process since 2008.