Equity Bank founder Peter Munga’s bid to stop a Ksh150 million demand over a botched share swap deal has flopped.
In a High Court ruling issued on Monday, Justice Mary Kasango dismissed Mr Munga’s plea seeking to strike out the case filed by his friend-turned-foe, Joseph Kamau, who is seeking Sh150 million compensation from the deep-pocketed Munga.
Although the judge agreed that Mr. Kamau had taken long to file an affidavit detailing whether the directors of Bethany Vineyards Ltd granted him the authority to file the case, the judge observed that Mr. Munga had suffered no prejudice from the delay.
“The affidavit was filed six months later. No explanation was given by the plaintiffs why they delayed in filing the affidavit. Notwithstanding that delay, there is in my view, no prejudice suffered by the 3rd defendant due to that delay,” said Justice Kasango said.
Munga wanted the case dismissed in its entirety, arguing that there was no resolution from the board of directors of Bethany granting Mr Kamau the authority to file the suit against him.
The former Equity Group chairman also averred that the case had failed because Mr. Kamau did not file the affidavit within seven days as directed by Justice Fred Ochieng in November 2017.
In reply, Mr. Kamau said the directors who greenlighted the filing of the case were legitimate and had also allowed him to swear the affidavit detailing the same.
Justice Kasango said there is no requirement for a company to present a resolution indicating that it had authorised the filing of a suit or an affidavit on its behalf. She allowed the affidavit but directed the company to pay Mr. Munga the costs for late submission.
In the matter, Bethany Vineyards and Mr. Kamau have accused Mr. Munga of refusing to pay since 2011 for three million TransCentury Limited shares worth Sh150 million that he purchased from the company.
Mr Kamau had sold the shares to Mr Munga in 2011 at Ksh50 each after failing to service a Ksh40 million loan he had taken from Equity Bank. In the deal, Mr Munga was supposed to clear Mr Kamau’s loan and remit the balance to him and his company.
Mr Munga had earlier proposed an out of court settlement and offered Mr Kamau Ksh90 million which prompted Mr Kamau to return to court.