Last week, tycoon Ngugi Kiuna lost his appeal to the Capital Markets Tribunal to stop the proposed buyout of BOC Kenya by fellow listed firm Carbacid Investments.
In May, he got a different outcome when the Court of Appeal upheld a Sh1.8 billion award to him by a lower court against Dutch brewer Heineken for unlawful termination of a distributorship contract. Heineken has, however, filed an appeal at the Supreme Court to fight the award.
The BOC Kenya matter, which had been before the tribunal since March 2021, cast Mr Kiuna as a defender of the rights of minority shareholders, who he felt were being shortchanged by Carbacid and its affiliate Aksaya Investments LLP when they priced their bid at Sh63.50 per share or a total of Sh1.2 billion.
By the time of going to press, Mr Kiuna had not indicated his next course of action after losing the tribunal appeal. He told this publication that he was out of town all week, and had not had the opportunity to look at the ruling.
His action against BOC Kenya and the Capital Markets Authority (CMA) mirrors his lawsuit in 2017 against Old Mutual Holdings when he argued that the firm had shortchanged shareholders in its life insurance subsidiary when it bought them out via a share swap during a restructuring of the UAP Holdings and Old Mutual businesses.
The bone of contention at the time was that the shareholders of Old Mutual Life Assurance Company (OMLAC) were being offered Sh12.75 per share and were compensated using UAP Holdings shares at a price of Sh180 per share. Mr Kiuna, who held 1.1 million OMLAC shares, was seeking parity in the share prices.
In the latest suit, Mr Kiuna named the CMA, BOC Kenya and its majority owner BOC Holdings (UK) as the respondents.
He argued that the CMA approved the offer without considering whether the rights and interests of the minority shareholders were protected, pointing to an independent valuation that assigned BOC Kenya a fair value of Sh91.76 per share.
The tribunal, however, found that the mandate of the CMA in approving takeovers does not extend to evaluating whether a price is good or bad, saying that doing so would go against its oversight role as a regulator.
Mr Kiuna’s gripe against BOC Holdings was due to the multinational’s commitment to sell its 65.4 percent stake to Carbacid at the offer price of Sh63.50, which he said did not take into account the value of cash holdings and land held by BOC Kenya.
In raising the appeal before the tribunal, Mr Kiuna found himself going up against a company (BOC Kenya) on whose board he had sat for 25 years between 1993 and 2018 —the last six as the chairman.
In the course of his association with BOC, the England-trained mechanical engineer had also acquired a substantial stake in the company, making him the second largest shareholder in the company behind BOC Holdings.
Since the beginning of the suit in 2021, he has raised the stake from 7.6 percent or 1.48 million shares to 11.2 percent or 2.19 million shares, perhaps with an eye on the takeover fight.
By holding more than 10 percent of the company, he is at least guaranteed protection against a mandatory buyout of his shares at the disputed offer price if others sell to the Carbacid consortium.
The law on takeovers and mergers allows a buyer to make a compulsory buyout of minority shareholders once they acquire at least 90 percent of a company. The minority shareholders being bought out compulsorily are paid either the market value of their shares or the amount offered to other shareholders, whichever is higher.
In addition to buying up more shares, Mr Kiuna recently proposed to nominate a representative on the BOC Kenya board, six years after his own exit.
A notice for the company’s 2024 annual general meeting indicated that he had nominated Dr Ngugi Kiuna as a non-executive director of BOC Kenya.
The AGM was due to be held on June 28, 2024, but the company issued a notice before the date saying that the meeting had been postponed to November 29, 2024, citing the occurrence of unforeseen and unspecified events.
The agenda of the meeting, however, remained unchanged.
Away from the lawsuits, Mr Kiuna has tended to keep a relatively low profile, preferring to run his business empire quietly. He has said in past interviews that he is likeliest to be found running Maxam Limited —the distributorship that sued Heineken.
Over the years, he has held interests worth billions in various companies, including listed blue chips. He was also one of the 29 founders of TransCentury, where he also sat on the board.
Mr Kiuna also served as managing director at industrial hygiene firm Johnson Diversey and Holman Brothers EA Limited, a heavy construction, commercial and industrial equipment supplier.
