With 92 branches, Naivas is by a distance the largest supermarket chain in Kenya. The supermarket chain has been on an expansion spree, driven by Private Equity (PE) investment, and aims to have 100 stores by the end of the year to cement its place as the biggest in the business.
The company however, faces numerous legal battles involving children of the late Peter Mukuha Kago, the patriarch who died in 2010. Various disputes involving Naivas Limited shares and Kago’s estate have been in the courts since 2012.
In the latest chapter, one of Kago’s children, Grace Wambui, wants the court to rectify a grant issued to her late brother Simon Gashwe by removing his name and substituting it with hers. She also says her brother David Kimani Mukuha should be barred from stopping the appointment of her other brother Newton Kagira Mukuha and herself as administrators.
Gashwe was named sole administrator of Kago’s estate in October 2016. Wambui states that Gashwe was appointed by the family members to administer the estate, distribute it among family members, and pay debts. She stated that Gashwe passed on before completing the task at hand while several disputes involving the estate continue to play out in court.
Wambui further stated that she does not object to the application by her elder brother Newton Kagira Mukuha to be one of the directors. Newton Kagira Mukuha had moved to court to challenge a previous High Court ruling that found he had no stake in Naivas.
Kagira has previously sought to have his younger brother David Kimani ousted as Naivas CEO, a seat on the company’s board, a 20% stake in Naivas and an additional 20% stake from his late father’s share of the company. Kagira is the eldest of three brothers who have since 2012 been locked in a battle for control of the firm.
“There are also some other properties of the estate of the late Peter Kago Mukuha which were improperly distributed and they need an administrator and or administrators to solve the disputes,” Wambui noted in court documents. “I and my brother Newton Kagira Mukuha can be appointed as administrators of the estate of our late father Peter Kago Mukuha to continue administering it until cases pending in court are complete,” she stated.
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Kagira, in October last year, moved to court under a certificate of urgency seeking to be named administrator of the estate following Gashwe’s death. In April, he sued Naivas Limited seeking orders to stop the sale of shares and distribution of Naivas Limited.
He argued that the shareholding of Naivas Limited has been in dispute, citing a court order issued on November 25, 2021, by the Court of Appeal in Nakuru. The Court had directed that the status quo in so far as the shares in dispute are concerned be maintained pending hearing and determination of the said appeal.
Kagira stated that Naivas Limited through its directors and shareholders was in the process of selling off its shares including the disputed shares. Charles Mukuha, a director at Naivas Limited, opposed the application by Kagira and sought to have it thrown out. Charles noted that the court had previously dismissed Kagira’s 20 per cent shareholding claim, further noting that Kagira appealed the ruling and the same is still pending in court – arguing that there was no basis for a new claim.
Kagira maintains that he is the beneficial owner of Naivas Limited, having contributed 20 per cent of its startup capital in 1990 when it began trading as Rongai Self-Service Store. The High Court, however, previously found that Naivas had ceased to be a family business on October 31, 1999, the day the late patriarch shared family assets among his children partly in a bid to end disputes.
At the time, he had established and grown Rongai Self-Service Store which had three supermarkets in Elburgon, Rongai and Naivasha. Newton Kagiri was handed the Rongai store and a house.
David Kimani and sister Linet Wairimu were given control of the Naivasha business while his Simon Gachwe and sister, Grace Wambui, were given a house and the Elburgon store. Eventually, Kimani and Gachwe teamed up and grew what became Naivas.
The brothers offered their two sisters a 15 percent stake each in Naivas and a 20 percent stake to their father. Kimani and Gachwe each held a 25 percent stake each in Naivas.
