Table of Contents
Key Points
- Kenya’s High Court has ordered Samuel Macharia to return Ksh400 million ($3.1 million) unlawfully withdrawn from Directline Assurance.
- Justice Alfred Mabeya ruled the fund transfer was illegal and aimed to cripple Directline, a major motor vehicle insurer.
- A 90-day forensic audit has been mandated, overseen by an interim board representing AKM Investments, Janus Ltd, and Royal Media Services.
Samuel Macharia, one of Kenya’s wealthiest media moguls, has been ordered by the High Court to return Ksh400 million ($3.1 million) that was unlawfully withdrawn from Directline Assurance Company Limited, a leading motor vehicle insurer in Kenya.
Justice Alfred Mabeya, in his ruling, stated that the transfer of funds by Macharia, 82, was illegal and intended to financially cripple the company. Macharia is the chairman of Royal Credit Limited, and also a significant shareholder in Directline Assurance.
"This is in order to meet the ends of justice and to secure the interest of the policyholders and claimants for compensation," Justice Mabeya said, directing that the funds be returned to the account from which they were withdrawn.
The court also mandated a forensic audit of the insurer's books, to be conducted by an interim board consisting of representatives from AKM Investments Ltd, Janus Ltd, and Royal Media Services Ltd, with a deadline of 90 days.
Ownership dispute and irregular withdrawals
The controversy stems from a 2019 incident when Macharia instructed the withdrawal of Ksh400 million ($3.1 million) from Directline's account to fund a housing project under his company, Toy and Suna Holdings.
The funds were intended to develop stalls and low-cost housing at Nairobi’s Toy Market. This move, however, was challenged by Terry Wanjiku Wijenje, a co-founder, director, and shareholder of Directline Assurance.
Wijenje, who holds a 20 percent stake in Janus Limited, asserted that her employment as a director was terminated by Macharia in 2019, a decision later overturned by a tribunal in 2020.
She raised concerns about irregular board appointments by Macharia, which she claimed violated Kenya’s Companies Act. Wijenje sought legal intervention to stop further withdrawals or transfers that could destabilize the insurer.
Broader legal battle
Samuel Macharia's dealings with Directline Assurance have long been the subject of scrutiny. In 2021, Kenya’s Director of Public Prosecutions, Noordin Haji, petitioned for the dismissal of a case against 14 directors of Directline, which involved allegations of fraudulent transfers of shares and Ksh4 billion ($36.3 million).
This ongoing legal battle has exposed ownership disputes, conflicting shareholder records, and claims of mismanagement involving billions siphoned from the company.
Directline, founded in 2005, faced collapse earlier this year after the Insurance Regulatory Authority froze its bank accounts. Macharia, chairman of Royal Credit Limited, blamed former directors for misappropriating Ksh7 billion ($54.1 million). He announced the company’s closure, termination of staff, and the transfer of assets to Royal Credit.
