Directline Assurance has faulted National Treasury Cabinet Secretary John Mbadi for comments he made on its shareholding while appearing before the National Assembly on Thursday, November 14.
In a statement on Tuesday, the company clarified that Royal Credit ‘did not and never has’ transferred its shareholding to anybody including all those persons and companies shown in the current CR12 (Certificate by the Registrar of Companies in Kenya indicating the details and the directors and shareholders of a Company).
“Several investigations have been conducted and they have all come to the conclusion that the purported changes in shareholding and directorships were null and void ab initio, and in violation of section 166 (1A) of the Insurance Act,” a section of the statement read.
Mbadi had told MPs that the reason why insurance services had been suspended by the company was a series of unresolved cases in court following a dispute among the shareholders who disagreed over certain appointments that were made within the company’s board of management.
“In mid-2019, shareholding disputes emerged, posing a risk to the insurer’s continued operations. The shareholders’ disputes are therefore still pending in various courts as well as the Insurance Appeals Tribunal,” Mbadi told the National Assembly Finance committee.
However, Directline denied these allegations and invited the CS to look over the joint investigation report that had found the claims of purported changes in its shareholding as null and void.
“The CS is well advised to acquaint himself with a multi-agency investigation report that reviewed the investigation that had been done by the DCI as it lays bare the fraud surrounding Directline’s Shareholding,” the statement read.
The multiagency investigation that brought together officials from the Directorate of Criminal Investigations (DCI), Auditor General (AG), Insurance Regulatory Authority (IRA), Office of the Director of Public Prosecutions (ODPP) among others, determined the alleged transfer of shares in the insurance company in 2005 and 2012 as null and void since the beginning.
The SK Macharia-owned company also insisted that no money had been transferred for allocation of the alleged shares by the purported allottees who were said to have been represented by trustees.
The MPs had summoned CS Mbadi over concerns about the fate of the highly relied upon public transportation sector as the insurance company controlled 65 per cent of all insurance services for Public Service Vehicles (PSVs).
The lawmakers stated that the termination of insurance services by Directline affected many public transport operators, with thousands of motorists facing auctions because the company was no longer compensating them.
On September 10, Directline Assurance announced they were halting insurance operations and asked the Association of Kenya Insurance Companies (AKI) to stop the issuance of any insurance certificates or stickers in its name.
A few days later, SK Macharia and his wife moved to court claiming they had been forcefully ejected from the company in a hostile takeover by individuals demanding control of the company.
In return, as the majority shareholder owner, the Royal Media Services owner suspended all the insurance operations in the popular insurance company.
