Afrigather The shutdown of Kenya’s Directline Assurance was linked to an alleged try by media mogul Samuel Kamau (SK) Macharia to keep away from a probe into an unauthorised $3 million (KES400m) switch to an organization he controls, in accordance with courtroom filings by the Insurance coverage Regulatory Authority (IRA) seen by TechCabal.
$3 million was wired to Toy and Suna Holdings Ltd from Directline’s Diamond Belief Checking account on Might 16, courtroom paperwork 4 confirmed. The regulator alleged the transaction was a scheme to defraud policyholders and beneficiaries of the corporate.
Samuel Macharia’s workplace didn’t instantly reply to a request for feedback.
The IRA alleged Macharia moved the thousands and thousands “purportedly to finance the event of stalls and low-cost housing on the Toy Market” in contravention of present laws.
“Part 191(2) of the Act prohibits insurers from participating in any enterprise aside from the enterprise for which they’re registered. It’s obvious on the face of the file that the topic transaction is just not insurance coverage enterprise and is, subsequently, a breach of the insurer’s license phrases,” IRA mentioned in its utility.
One particular person with direct information of the matter claimed Macharia, fondly known as SK, hurriedly closed the insurer after the regulator flagged the transaction and moved to courtroom.
“The board of Directline has been dissolved and all of the property taken over by Royal Credit score Ltd. All workers have been dismissed, and Directline will not challenge insurance coverage companies,” Macharia introduced on Citizen TV, a number one Kenyan information outlet he owns by means of Royal Media Service (RMS).
The sudden closure brought about panic amongst policyholders who stood to lose $15.4 million (KES2 billion) in unpaid claims and threw employees and brokers into limbo. The Insurance coverage Regulatory Authority (IRA) stepped in and revoked the choice.
“The purported actions are null and devoid of any authorized impact and as such the insurer continues in full operation as licensed and permitted by the Authority. The purported switch of the property of the insurer to any third occasion is subsequently null and void ab initio,” mentioned Godrey Kiptum, IRA chief govt.
This newest standoff provides to the listing of feuds Macharia has had with the regulator and different administrators within the firm. Since 2018, IRA has maintained that the billionaire and his associates don’t personal a controlling stake, a place he disputes.
IRA shareholder register reveals that Macharia by means of RMS owns 10% within the underwriter, whereas 4 different funding autos maintain a 20% stake every. In 2019, Macharia challenged this place in courtroom, claiming that his household owns 20% whereas AKM Investments, an organization owned by his son who died in 2018, holds a 48% share.
However Macharia’s declare was in breach of the regulator’s shareholding restrict that caps particular person stake in insurers at 25%. The matter continues to be pending in courtroom.
