Naivas Lifestyle

Naivas Supermarket outlet at Hazina Trade Centre (Lifestyle) in Nairobi. 

| Salaton Njau | Nation Media Group

Naivas hires new law firm to fight appeal by founder’s son

What you need to know:

  • The fight for control of Naivas went public in November 2012 when Mr Newton Kagiri Mukuha went to court seeking shares in the retail chain.
  • Court cases pitting the siblings against their disgruntled brother had stalled talks for additional share sales to equity investors.

Family-owned Naivas Supermarkets has hired one of the largest corporate law firms in Africa to challenge a bid by an offspring of the founder to get a stake in the retailer.

Coulson Harney LLP, a pan-African law firm with offices in Nairobi will handle an appeal filed by Newton Kagiri Mukuha in a Nakuru court. 

Mr Kagiri, who claims he contributed seed capital when Naivas was founded, has been fighting for shares in the retail chain since 2012.

The new development comes less than a month after a three-judge bench in Nairobi dismissed Kagiri’s appeal and affirmed a 2014 High Court judgment that found that he had no investment in the company.

In the appeal, Mr Kagiri wants the court to stop the sale of shares in Naivas. A hearing is planned for next month.

Naivas has written to Mr Kagiri, informing him that Coulson Harney LLP will now handle the matter.

Stake in Naivas Supermarkets

“Take notice that the respondent Charles Mukuha Simon Gashwe has appointed the firm of Coulson Harney LLP Advocates…to act for it in this matter instead of Ms Thuita Kiiru & Company Advocates,” says a letter to Mr Kagiri. 

“All correspondence and process should be addressed to and served upon the said firm.”

At the Nakuru High Court, where Mr Kagiri has already secured restraining orders stopping further sales of stake in Naivas, he is also seeking the ouster of his brother, David Kimani, as CEO of Naivas, a seat on the board of the retailer, a 20 percent stake and additional shares from the 20 percent stake held by his father, the late Peter Mukuha Kago.

He also petitioned the court to freeze further share sales in Naivas and for a deposit in an interest-earning joint account of Sh6 billion, which a consortium of investors paid for a 30 percent stake in the retailer.

He also claims ownership of a 20 percent stake worth Sh4 billion from his seed capital that established Naivas and the inheritance of his father’s stake.

Share sales to equity investors

Appellant judges David Musinga, Hannah Okwengu and Asike Makhanda agreed to freeze further share sales but did not issue orders on Mr Kagiri’s other demands.

"In the meantime, the status quo in so far as the shares in dispute are concerned be maintained pending hearing and determination of the appeal," said the judges in a ruling delivered on November 25 last year.

Less than two years ago, Naivas received Sh6 billion from the International Finance Corporation (IFC), private equity firms Amethis and MCB Equity Fund and German sovereign wealth fund DEG for a minority stake of 30 per cent

The fight for control of Naivas went public in November 2012 when Mr Kagiri sued, seeking orders to stop the sale of the retailer to South Africa’s Massmart. The deal collapsed.

Naivas insiders told the Nation in confidence that the court cases pitting the siblings against their disgruntled brother had stalled talks for additional share sales to equity investors who want to increase their stake from 30 per cent to 40 per cent.

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