Home » Court rejects bid by late Kenyan multimillionaire’s son in Naivas share dispute

Court rejects bid by late Kenyan multimillionaire’s son in Naivas share dispute

Kagira's struggle for Naivas unveils tensions in shareholding and ownership

by Mfonobong Nsehe
Peter Mukuha Kago

Newton Kagira Mukuha, the scion of the late Kenyan business titan Peter Mukuha Kago (founder of Naivas Limited in 1990), suffered a blow in his legal fight against his siblings over shareholder control of the supermarket chain. A three-judge panel at the Court of Appeal dismissed his application challenging the contested sale of Naivas shares.

The judges, Kathurima M’Inoti, Fatuma Sichale, and Fred Ochieng, ruled that Kagira failed to provide evidence that his siblings willfully disobeyed a court order concerning the shares of the company. The court stated, “The applicant has not demonstrated to us that the status quo pertaining to the disputed 10,000 shares in Naivas has been violated by the respondents.”

Newton Kagira Mukuha, the eldest son of Naivas Limited founder Peter Mukuha Kago who is a beneficiary of the estate of the late Kenyan businessman, alleged that his siblings violated a court order issued on Nov. 25, 2021. The court had ordered the maintenance of the status quo over the disputed shares in Naivas Ltd pending the resolution of the appeal.

Kagira’s struggle for Naivas unveils tensions in shareholding and ownership

The crux of Kagira’s argument centered on his claim that his siblings had ignored the court order, leading to the interference with the shareholding and ownership of Naivas. However, the judges rebuffed Kagira’s plea, emphasizing that he sought to attribute the actions of various entities, including Naivas, Gakiwawa Family Investment, and Mambo Retail, to his siblings.

Kagira alleged that, in a resolution on April 24, 2018, 50,000 shares were transferred to Naivas International, and he further claimed that the continued sale of shares, including 10,000 shares belonging to his siblings, was in violation of the court order.

The judges noted that Kagira’s legal action coincided with Naivas’ announcement of the IBL Group’s intention to acquire an additional 11-percent share in Naivas. This strategic move allowed Mambo Retail to secure a controlling 51 percent stake in Naivas on July 3, 2023.

Market leader Naivas faces legal headwinds amidst expansion and stake sales

Despite Newton Kagira Mukuha’s claims, the judges emphasized that the court had not directed either party to take specific actions but had merely ordered the maintenance of the status quo regarding the disputed shares.

Naivas Limited, a key player in the Kenyan market since 1990, founded by Peter Mukuha Kago, finds itself entangled in a legal dispute that adds complexity to its narrative amid ambitious expansion plans. 

This episode unfolds against the backdrop of Naivas’ intention to open two additional branches in Kenya, solidifying its position as the largest retail player in the country. The recent sale of an additional 11-percent stake in Naivas International, valued at $41.7 million, reflects the Mukuha family’s commitment to pursuing profitability and market share growth.

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