Citizen TV's billionaire S.K Macharia's move to forcefully take over Kenya's largest PSV insurance underwriter was dealt a major blow after the industry regulator blocked his efforts.
According to Business Daily on Thursday, September 5, the media mogul flouted procedures in appointing himself chairman at DirectLine Assurance Company. They also accused Macharia of staging a coup and sending home the directors of the firm and appointing replacements.
"The purported appointments of chairman, directors and CEO is against the provisions of the Insurance Act and the corporate governance guidelines which require that such persons be approved by the commissioner before they can take up those positions,” Insurance Regulatory Authority (IRA) Chief Executive Godfrey Kiptum intervened as reported by the publication.
It further reported that Macharia defended his move, alleging that he acted to preserve the authority of majority shareholders in the company.
According to the Daily Nation on Wednesday, September 4, Macharia wrote a letter to the company's staff stating that he had made the decision 'in the interest of preserving the company'.
"I write to you in my capacity as a representative of the majority shareholders, namely Royal Media Services, Royal Credit Limited, S.K Macharia, P.G Macharia [Macharia’s wife Purity] and the estate of the late Dan Karobia,” he wrote in the letter dated Tuesday, September 3.
The first action he took after the takeover was to suspend Terry Wijenje who was the Managing Director, CEO and principal and replaced her with Isaac Ngaru in an acting capacity.
“I take over the position of director and chairman. All staff should report to their respective offices and continue with their duties as normal,” Macharia added.
Macharia's son, John Gichia Macharia, who died in 2018 was also a major shareholder.
Gichia died at the Karen Hospital where he had been rushed to after a freak accident along the Southern bypass.
