An insurance company linked to President William Ruto’s family has been given two weeks to deposit Sh1 million in a joint interest-earning account or face liquidation over Sh10 million unpaid clients’ claims.
High Court judge Freda Mugambi ruled that if African Merchants Assurance Company Limited (Amaco) fails to deposit the funds as directed, the liquidation order would be reinstated and the official receiver appointed the liquidator of the insurance company. Liquidation is the process of closing a business so that its assets can be sold to pay its debts.
The president’s family is among the company’s shareholders accounting for 190,000 shares, or 15 per cent through Yegen Farms Limited. First Lady Rachel Ruto and her daughter Charlene Ruto are the listed shareholders of Yegen Farms Ltd.
“In an effort to strike a fair and delicate balance-and acknowledging the company’s partial attempts to address its financial obligations, I hereby grant a 14-day lifeline to the underwriter to deposit in court Sh1 million as opposed to a joint interest earning account, within two weeks without exception,” said Justice Mugambi.
The insurer moved to court seeking a review and setting aside of the liquidation order issued on November 18, 2020.
The court noted that the company has repeatedly failed to comply with court orders, specifically regarding the directive to deposit Sh1 million in a joint account.
Justice Mugambi stated that Amaco had consistently missed court-imposed deadlines and engaged the six petitioners’ advocates in back-and-forth discussions over account-opening procedures while deflecting responsibility onto others.
“This pattern of behaviour suggests a deliberate attempt to delay compliance, rather than a genuine effort to resolve the matter,” said the judge.
According to the judge, the insurer continued to owe significant sums to the petitioners, despite some payments having been made.
“Partial compliance, in my view, is clear evidence that the company may in fact be solvent and capable of paying its debts but has chosen not to do so in full, to the detriment of the petitioners,” the judge said.
Ms Elizabeth Wawira Karithi, Anisia Muthoni Njeru, Faith Muthoni Mwendia, Silas Muriuki Kinoti, Abel Mwangi and John Mwangi sought the liquidation of the company over failure to comply with various court orders, including depositing the amount in the joint account.
Evidence presented in court showed that the petitioners filed a case seeking to liquidate the company under the supervision of the Official Receiver.
The petitioners’ said they instituted several cases on diverse dates in 2017, 2018 and 2019, seeking payments awarded to them in suits against the company.
A judgment was entered in the petitioners’ favour in the various courts and the company was eventually directed to settle a total sum of Sh10.2 million plus costs and interests.
It is the liquidation order that precipitated the filing of the insurer’s application seeking a review and to set it aside.
On September 16, 2021, the court set aside the liquidation order on condition that the company pays Sh1 million into a joint account held by the parties’ advocates on record within 60 days of the ruling.
In the application, the company’s Chief Executive Officer Eric Lagat Keter said Amaco promptly filed and served its response to the petition in full compliance with the court’s directions.
However, it contends that the petitioners’ advocates have actively hindered its efforts to comply with the court’s order to deposit funds in a joint account.
The company further said as a result of the liquidation order and subsequent conduct by the petitioners’ advocates, the insurer “has been seriously prejudiced, embarrassed and affected in its operations and unless the orders sought are urgently granted, it would be formally taken over by the Official Receiver.”
But Amaco maintained that it already paid all amounts in question under the petition and faces the real risk of being unjustly condemned for a non-existent debt.
Further, despite being fully aware of the existing liquidation order, the petitioners’ advocates continue to execute actions against the company.
Source link : https://nation.africa/kenya/business/amaco-insurance-risks-closure-over-sh10m-unsettled-claims-case–4792608
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Publish date : 2024-10-12 09:57:04
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