Win for airline founder as court quashes report
A former founder of Blue Bird Aviation Ltd has succeeded in quashing a report that was tabled in court last year valuing his shares in the company at Sh320 million, after a bitter fallout.
Mr Adan Abid Yusuf, a former miraa trader who founded the airline in 1992, successfully argued that the report prepared by RSM (East Africa) Consulting Ltd, a firm that was picked in consultation with his former partners, did not present a true picture of the value of his shares in the company.
Justice Njoki Mwangi agreed with Mr Yusuf saying there was no transparency and independence in the preparation of the business valuation report, which was integral especially when a valuer is appointed by rivalling parties.
“The asset valuation report which was unsigned and unsealed at the time of issuance to the parties remains invalid. This leads to the only conclusion that the assets valuation report was for all intents and purposes, incompetent and has no value,” the judge said.
When he founded the company, Mr Yussuf said he approached his friends to start a company to fly miraa to the lucrative market in Somalia.
He invited two former Kenya Air Force officers, Col Hussein Farah and Maj Hussein Mohammed to form Bluebird Aviation Company in 1992. Another entrant was a pilot, Mohammed Abdikadir, and each owned a 25 per cent stake in the company.
The company flourished and even acquired more aircraft before the fallout that saw the businessman file multiple cases in court until three years ago when the court directed his partners to buy him out.
The report was to value the aircraft, land, and buildings owned by the company, review the balance sheet and prepare a financial model incorporating historical performance over the preceding three years.
Upon conclusion, the report was prepared and shared with the parties, and the money was wired to the Judiciary account and Mr Yusuf shares were transferred to Mr Abdikadir.
Challenged report
Mr Yusuf challenged the report arguing that the Sh320 million as his shareholding was a speculative figure as the financial statements relied upon were not provided in support of the amount.
He said he made requests to be supplied with the audited financial statements but his appeal was ignored.
Mr Yusuf said he was supplied with the report on December 6, 2021, but noticed that the audited financial reports for the financial years from 2017 to 2021 were not availed.
According to the businessman, the financial statements were deliberately excluded from the business valuation report to compel him to accept the shareholding as presented in the report.
He said the consulting firm refused to consider crucial facts integral to the valuation exercise such as the aviation firm having subsidiaries or associates.
Mr Yusuf said the report should communicate the methods considered and approaches used along with the reasoning for using a particular approach, as well as present the supporting documentation simply and concisely. BY DAILY NATION
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