Family rivalry has rocked retail giant Naivas Supermarket after the one of the brothers moved to court seeking to block any stake sales in the retailer.
Newton Kagiri Mukuha, the eldest of the three brothers has renewed his fight over the retail chain in a row that has seen the High Court block further stake sales in the firm.
“In the meantime, the status quo in so far as the shares in dispute are concerned be maintained pending hearing and determination of the appeal,” said the judges in a ruling delivered on November 25 and made public last week.
Kagiri is also seeking the ouster of his brother David Kimani as Chief Executive Officer of Naivas.
He also wants a seat on the board of the retailer, a 20 per cent stake and additional shares from the 20 per cent stake held by his dad, the late Peter Mukuha Kago.
He claims that he is entitled to a 20 per cent stake worth Sh4 billion from his seed capital that established Naivas and the inheritance of his father’s stake.
He also petitioned the court to freeze further share sales in Naivas and for a deposit of the Sh6 billion, which a consortium of investors paid for a 30 per cent stake in the retailer in an interest-earning joint account.
The new fight comes slightly a year after Naivas successfully sold a 30 per cent stake at Sh6 billion.
The stake was sold to among others the World Bank’s International Finance Corporation.
Others who took part in the deal include private equity firms Amethis and MCB Equity Fund and German sovereign wealth fund DEG. This sale took Naivas’ valuation to Sh20 billion
The family feud to control Naivas went public on 2012 when Kagiri applied for an injunction from the high court to block the sale of the family’s Naivas supermarket chain while a dispute over inheritance was resolved.
South African conglomerate Massmart, majority owned by US family business Walmart, is mulling a 51 per cent stake in the chain, which was founded by his father and is now owned by four of his siblings. It is reportedly worth $70 million (€53 million).
But a high court judge had given the deal the go-ahead on the grounds an injunction would discourage foreign direct investment in the country.
Kagiha argued the company was a family business, and he was therefore entitled to benefit from the impending deal.
However his siblings argued that although the business was family owned it had always been run as a private, limited liability company rather than a traditional family business.
Two brothers, Simon Gashwe and Kimani, fill the two director roles at Naivas, while their two sisters, Grace Wambui and Linnet Wairimu, hold senior management positions.
The two brothers originally held 25 per cent stakes in the business, while the two sisters held 15 per cent each.
Upon their father’s death in 2010 his 20 per cent stake was divided between the four.