The High Court in Nairobi has stopped the planned sale of 75 million Britam Insurance Company shares at the center of a dispute between businessman Dr. Peter Munga and the Africa Banking Corporation (ABC Bank).
- •Justice Peter Mulwa of the Commercial and Tax Division issued a temporary injunction restraining the lender, its investment arm ABC Capital, and the Central Depository and Settlement Corporation from transferring or disposing of the shares until the full hearing of the suit.
- •The court ruled that Rose Njambi Munga, the wife of the businessman, had demonstrated a legitimate claim that part of the stock may constitute matrimonial property.
- •Dr. Munga used the 75 million shares, worth billions of shillings on the Nairobi Securities Exchange (NSE), to secure multimillion-shilling credit facilities from ABC Bank.
“I find that the loss of the shares before the hearing of the suit would occasion irreparable prejudice to the applicant (Rose Munga). In view of the foregoing, I am satisfied that she has met the threshold for the grant of an interlocutory injunction,” Justice Mulwa stated.
The ruling preserves the ownership status of one of the largest individual shareholdings in Britam as the court examines whether spousal property rights outweigh the lender’s right to recover debt from her husband. The court also directed Rose Munga to deposit KSh 100 million in a joint interest-bearing account as security for the preservation of the assets.
The bank, through its legal manager, argued that the shares were validly pledged under a memorandum of charge, lien, and blank transfer forms executed by Dr. Munga, and that it had initiated recovery after he failed to repay outstanding sums of KSh 274 million and USD 1.2 million. It told the court the case was the latest in a string of lawsuits filed by the Munga family to block debt recovery.
Rose Munga countered that the shares were jointly acquired during marriage and therefore could not be pledged without her consent under the Matrimonial Property Act.
She also said that while 25 million shares are registered in her own name, the remaining 50 million, held in her husband’s name, were purchased contemporaneously and form part of their jointly owned estate. She warned that the sale would permanently deprive her of her only substantial asset.
The injunction does not determine ownership but freezes any dealings in the Britam shares until the court hears the main suit, which will decide whether the 50 million shares registered in Dr. Munga’s name qualify as matrimonial property.
For now, it leaves ABC Bank unable to liquidate one of its largest pledged shareholdings and sets the stage for a trial that could redefine how spousal consent applies to high-value financial instruments.