Equity Bank founder Peter Munga’s mission to stop a multi-million shilling demand over a botched share sale deal has failed.
In a court ruling delivered by Justice Mary Kasango, Mr Munga’s plea that was seeking to strike out the case filed by his friend and now foe, Joseph Kamau, who is seeking Sh150m compensation from the tycoon.
The judge however 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. Justice Kasango said Mr Munga had not suffered any prejudice due to 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 in her ruling.
Mr Munga bid was to have the case dismissed, arguing that there was no resolution from the board of directors of Bethany authorising Mr Kamau to file the claim against him. He also added that other than lacking authority, he claimed the case was meaningless because Mr Kamau filed the affidavit after seven days had elapsed, contrary to directions by Justice Fred Ochieng in November 2017.
Mr Kamau on his side claimed the directors who sanctioned the filing of the case were legitimate and had also allowed him to swear the affidavit outlining the same.
Justice Kasango stressed in her ruling that 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 Bethany Vineyards to pay Mr Munga the costs incurred for submitting them late.
Bethany Vineyards and Mr Kamau had claimed that Mr Munga had refused to pay for three million TransCentury Limited shares worth Sh150 million that he purchased from the company in 2011.
Kamau sold the shares to Munga at Sh50 after failing pay a Sh40 million loan he took from Equity. The deal required Mr Munga to settle the loan and remit the balance to Kamau and his company.
Mr Munga had initially offered to settle the dispute out of court and pay Mr Kamau Sh90 million but he (Kamau) declined the offer, prompting the suit’s return to court.