Table of Contents
Key Points
- Directline Assurance seeks court injunction to stop Samuel Macharia’s cautionary ads warning the public against the insurer.
- Macharia ordered to return Ksh400 million ($3.1 million) unlawfully withdrawn from Directline’s account, following an October 2024 ruling.
- Directline faces financial difficulties after Ksh7 billion ($54.1 million) misappropriation allegations, with plans for shutdown and asset transfer.
Directline Assurance Company Limited has moved to court in a bid to stop one of Kenya’s wealthiest media moguls, Samuel Macharia, from airing cautionary advertisements that warn the public against dealing with the insurer.
The move is the latest development in the ongoing legal and business tussle between the 83-year-old media mogul and the Nairobi-based motor vehicle insurance company.
Directline requests court injunction against Macharia
In a court filing, Directline’s management requested an injunction to stop Macharia from continuing his media campaign, signaling further complications in their long-standing dispute.
This comes on the heels of a court ruling in October 2024 that ordered Macharia to return Ksh400 million ($3.1 million) that was withdrawn from Directline's account unlawfully. The court deemed the transfer illegal and an attempt to financially destabilize the insurer.
The court also mandated a forensic audit of Directline's books, with an interim board to oversee the investigation. The board will include representatives from AKM Investments Ltd, Janus Ltd, and Royal Media Services Ltd, with a 90-day deadline for the audit.
Macharia's legal battle with Directline
Macharia, 83, the chairman of Royal Credit Limited, has long been a significant shareholder and influential figure at Directline.
The insurer, founded in 2005, has been a key player in Kenya’s insurance sector, particularly in motor vehicle insurance. In the 2022/2023 fiscal year, Directline reported a Ksh4.1 billion ($31.6 million) income, driven by partnerships with agents, brokers, and banks.
The contentious relationship between Macharia and Directline dates back to 2019, when he instructed the withdrawal of Ksh400 million from the company’s account to fund a housing project under his company, Toy and Suna Holdings.
This move was challenged by Terry Wanjiku Wijenje, a co-founder and shareholder of Directline, who contended that the withdrawal violated company regulations. The issue of irregular board appointments further fueled the dispute, leading to legal interventions.
Directline’s struggles amid misappropriation allegations
Directline's financial challenges deepened in 2024 after its accounts were frozen by the Insurance Regulatory Authority, with Macharia accusing former directors of misappropriating Ksh7 billion ($54.1 million). As a result, Macharia revealed plans to shut down the company, lay off staff, and transfer its assets to Royal Credit.
Despite these setbacks, Macharia, one of Kenya’s wealthiest individuals, continues to be a prominent figure in the country’s business world. He holds significant stakes in Directline and leads Royal Media Services, one of the largest private radio and TV networks in East Africa.
