Media magnate SK Macharia has lost a court case against his grandson seeking to reverse a decision which removed him as the administrator of his late son who died four years ago leaving behind a Sh1.2 billion estate.
Justice Mugure Thande dismissed Macharia’s application seeking to reverse a ruling last year, which removed him as administrator of the estate of John Gichia.
The Judge noted that the grants issued to Macharia in April 2019 were issued prematurely denying any interested party to raise objections to the proceedings.
“The issuance of the two grants before the expiry of the 30 days stipulated in the said Kenya Gazette notice rendered the grants illegal,” she said adding that reversing the revocation, as sought by Macharia, would give new life to the grant, therefore, sanctioning an illegality.
The suit points to a rift in the family over the Sh1.2 billion estate after Gichia’s mother, Serah Njeri, withdrew from the application to administer the estate ‘for the sake of family’ unity and because her grandson was now over 18 years.
The estate had been put under their administration as grandparents of Gichia’s son, Adam, who was 16 years when Gichia died in a road accident in April 2018.
High Court judge Stella Mutuku revoked letters granted last year, after Macharia’s grandson, Adam Kamau Macharia, moved to court in May 2020, seeking to stop his grandfather from administering the estate.
Adam told the court that he was a minor at the time the letters of administration were issued to his grandparents and that he was seeking a piece of his father’s wealth now that he’s an adult.
“The circumstances dictate that this court relooks the issues of representation in this estate afresh and make appropriate orders after hearing the parties. It is also clear to me that as at the time the two grants were issued, the sole beneficiary was a minor,” Justice Mutuku said.
But the media tycoon went back to court arguing that he and his late son had interests in companies battling court cases.
He pleaded with the court to be given limited grant to administer the estate, arguing that there is no administrator to protect the assets of his late son, yet his company- Directline Insurance is also facing a flurry of suits at different courts.
Macharia said he has also been sued as the administrator of the estate, in AKM Investments ltd, which owns 600,000 shares. He says the estate should be protected, especially after his wife Serah withdrew as the administrator.
He further submitted that Adam was being used by his mother- Lisa Anyango to fight him.
The grandson opposed saying he had no legal capacity to administer the estate of his father. He said Macharia was a man of means and was no dependent on the estate.
Adam said his father was the majority shareholder of Directline and Macharia maliciously used the grant to take over the control of the insurance company and has made changes, including diminishing the value of his father’s shareholding in the underwriter.
The grandson added that reversing the decision and allowing Macharia as the administrator would be prejudicial to him because his grandfather has failed to table the accounts of his dealings with the estate, and also failed to disclose the dividends paid to the estate of his father from Directline or any other companies where Gichia had an interest.
In the ruling, Justice Thande said it would present an awkward situation were Macharia as the administrator of the estate of his late son, would be defending suits filed by a company of which he is the chairman.
“In view of these positions, SK Macharia would clearly have two relationships competing with each other for his loyalty. When push comes to shove, as it most likely shall, will SK Macharia choose his company over the estate, or the estate over his company? In light of this, the conflict of interest is undeniable,” the Judge said.
She agreed with an earlier ruling by Justice Mutuku revoking Macharia as the administrator, saying allowing him to continue in the same position would be in conflict of interest.
The estate comprises shares in more than six companies that have investments in insurance, communications and real estate.
The companies are listed as Directline Insurance, Serenity Media Productions Ltd, Big Five Conservancy, Bushfire Media Distributors, Toi Redevelopment and Harbour Capital Ltd.
Other properties are nine vehicles – two Range Rover cars, Land Rover, Jaguar, Jeep, Porsche 911, BMW, Trailer and Land Rover Discovery — four motorbikes and five residential houses in Nanyuki, Loresho (Nairobi), Kyuna crescent (Nairobi), Kibarage (Nairobi) and Mugumo crescent (Nairobi).
The registered owner of the properties is AKM Investments Ltd. Adam says the name of the company, AKM investments, was borrowed from initials of his name Adam Kamau Macharia.
Court papers indicate that at the time of his death, Gichia was the executive director of Directline Assurance Company and Adam occasionally worked there during school holidays.
Adam says he is aware Directline has 15 million shares distributed amongst 10 shareholders.
They include Janus Ltd, Sureinvest Company and Stenny Investments PTY Ltd holding three million shares each, calculated to be 20 percent each.
Other shareholders are Triad Networks (2,999,407 shares), AKM Investment (1,551,000), Royal Media Services (1,448,593) and Royal Credit Card (997).
