Politician in court over acquisition of deceased investor’s property
A company associated with a city politician has been sued for disinheriting siblings of a deceased Italian investor their shares in micro-fiance company.
House of Procurements Limited (HPL) whose director is Francis Mureithi Wambugu, is accused of filing returns at the Company Registry claiming the company had acquired the shares of the late Gonzalo Hernadez Ciriza in Meridian Acceptances Limited (MAL).
Wambugu has unsuccessfully vied for the Embakassi East parliamentary seat on two occasions.
MAL is a micro-finance company which advances loans to businessmen and automobile entrepreneurs.
In the suit, James Ndwigah Muchungu who is battling to retain MAL claims in the evidence filed in court that he has been fraudulently removed from the company by Wambugu, a minority shareholder through HPL.
Muchungu has urged the high court to prohibit Wambugu from misrepresenting facts at the Registrar of Companies in a bid to inherit the shares of the late Italian investor, Gonzalo Hernadez Ciriza, irregularly in MAL.
Muchungu says they had majority shares in MAL with Gonzalo who passed on in 2018.
In the case filed under a certificate of urgency by lawyer Geoffrey Langat, Muchungu claims HPL has falsified company returns at the Registrar of Company (RoC), over change of directors in MAL.
“Muchungu who has been a director/shareholder was illegally removed as a director of Meridian Acceptances Limited (C.146874) and further illegal and fraudulent changes have been done in the company,” Langat states in the court evidence, at the High Court Milimani, Commercial Division.
Muchungu has been a director and shareholder of MAL since it was registered until February 15, 2023 when he discovered that he was removed following changes effected on the Company Register on January 12,2021 and April 5,2023 respectively.
Langat, who is seeking court intervention to salvage the company states that there is a move to completely remove him and transfer his shares to HPL.
Langat who is urging the court to prohibit any further action in the company (MAL) has disclosed that HPL has purported to inherit the shares of the deceased director Gonzalo.
HPL has purported to acquire the shares of the late Gonzalo Hernadez Ciriza without his (Muchungu) or the heirs consent.
Langat informs the court that Mureithi, a minority share-holder in MAL with 37.7 per cent shares is now commandeering MAL, “hence tantamount to a coup by the minority.”
“HPL, the illegally appointed director of MAL, continued with the illegalities and fraud by purporting to hold an Annual General Meeting (AGM) on February 2,2023 with intend to remove the late Gonzalo Ciriza without a confirmed Grant defining heirs of his expansive estate,” Langat states.
The court has been told the AGM of HPL was attended by its two directors Francis Mureithi Wambugu and Bernard Odote.
Muchungu has disclosed that he wrote to the Registrar of Companies through Langat on April 5, 2023 to freeze or archive the company (MAL) to forestall any further illegalities but no response has been received.
Besides Muchungu and the late Gonzalo, Wambugu, other shareholders are Paloma Mosequera Ciriza, Eduardo Hernadez Ciriza and Joan Hernadez Ciriza.
As per Clause 8 of the memorandum and articles of association of MAL states that “any director/shareholder has pre-emptive rights before sell or transfer of shares to new shareholders.”
Muchungu says he has since discovered irregular and illegal activities in the company without his participation and consent contrary to the rules of their company.
He is now asking the court to freeze all company accounts held in Kingdom Bank Limited and Kenya Commercial Bank Ltd in a bid to preserve its funds besides other assets.
But Odote, a director of HPL, says the jointer of the company (HPL) in the case filed by Muchungu against Registrar of Companies (RoC), is unnecessary since HPL is a separate and distinct legal entity from MAL.
Odote says HPL is not an agent of MAL and cannot therefore receive documents.
Odote has disclosed that Muchungu is facing a Sh200million criminal case for allegedly embezzling MAL funds during his tenure as director of the company.
Besides the criminal case, Odote has disclosed that Justice David Majanja in November 3,2021 , barred Muchungu from conducting the business of MAL.
Further Justice Majanja ordered Muchungu to surrender company property in his possession.
The registrar of the commercial court division has listed the case for hearing October 2,2023.
RoC is yet to file responses to the suit. RoC has been named as the first defendant and HPL the second defendant by Muchungu, the plaintiff.