Tatu major shareholders object move by minority investors

November 17, 2015
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The two companies made their presentation before Commercial Court Judge Eric Ogolla/FILE
The two companies made their presentation before Commercial Court Judge Eric Ogolla/FILE
NAIROBI, Kenya, Nov 17 – Tatu City and Kofinaf Ltd say they will resist an application by its minority shareholders to block their withdrawal from a civil suit regarding its ownership, management and control.

The two companies made their presentation before Commercial Court Judge Eric Ogolla.

The two ‘parent’ companies, of the now controversial Sh240billion Tatu City project have already successfully applied to be excluded from the four-year old dispute but the local partners have objected to the move.

The minority shareholders; former Central Bank of Kenya (CBK) Governor Nahashon Nyagah and Bidco CEO Vimal Shah claim the majority shareholders, who happen to be foreign investors, want to sideline them.

Senior Counsel Ahmednasir Abdullahi, acting for the two firms asserted that the contentious suits were filed by lawyer Nelson Havi on behalf of the local partners without the authority of the boards of directors.

Abdullahi applied for two weeks to file replying affidavits by directors of the two firms who are abroad.

The directors want to refute allegations made by Nyagah, against express resolutions sanctioned by the board of directors during their meeting at Tatu House on September 16.

Nyagah reportedly chaired the controversial meeting where it was unanimously agreed that the suits be withdrawn but allegedly voted against the resolution.

Havi on his part accused Abdullahi of abusing the court process by adopting delaying tactics to defeat the purpose of the application seeking to set aside the withdrawal of the two parent companies.

The aggrieved local partners, led by Nyagah and industrialist Vimal Shah, claim the disputes cannot be resolved without the participation of the parent companies.

The two warring parties mutually agreed to present their formal arguments on December 8.

Court of Appeal Judges Erastus Githinji, Martha Koome and G.B.M. Kariuki have reserved their ruling regarding the status of the suits and whether the proceedings before the High Court should be suspended.

The foreign shareholders, led by Stephen Jennings, have accused their local partners of attempting to alienate and transfer more than 2,000 acres of land belonging to the companies.

But Nyagah and Shah claim they have been side-stepped in the management and financing of the mega-project and have demanded a forensic audit of it accounts.

The Directorate of Criminal Investigations (CID) has been investigating Nyagah over allegations that he used close relatives and cronies to irregularly transfer shares worth Sh5.5billion in a grand conspiracy to defraud the parent company.

Nyagah has been granted temporary conservatory orders stopping his arrest pending the outcome of his petition challenging the validity of the investigations.

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