The High Court has struck out a petition by Kenya Reinsurance Corporation (Kenya Re) minority shareholders seeking to overturn the election of directors at the company's annual general meeting held on June 19, 2026. The court upheld Kenya Re’s preliminary objection against the suit, finding that the dispute concerned the company’s Articles of Association and shareholder rights, rather than a constitutional matter.
The court stated that the dispute could be addressed through the statutory remedies provided under the Companies Act, including provisions allowing shareholders to challenge oppressive or unfairly prejudicial conduct and seek relief in relation to the company’s governance and their rights as members. This ruling was given by Justice David Mburu, who emphasized that the constitutional jurisdiction of the Court should not be invoked as a substitute for the framework provided under the Companies Act.
Kenya Re is a Nairobi Securities Exchange-listed company in which the government holds a controlling 60 percent stake, while the remaining 40 percent is owned by public shareholders. The company provides reinsurance services to more than 482 companies across more than 84 countries. The case filed by shareholder Rakesh Gadani, the African Institute for Peace and Human Rights, and David Kinyanjui, followed Kenya Re’s February 11 decision to divide ordinary shares into Class A and Class B for board representation.
The amended Articles gave Class A shareholders three board seats while Class B shareholders got five seats. Both classes retained equal rights except on nomination and election of directors, according to the court ruling. Seven directors, some of whom were subsequently ousted by the Treasury, were joined as interested parties in the dispute. They were Eric Gumbo, Jackline Nyandeje, Leah Rotich, David Muthusi, Irungu Kirika, Abdirahin Abdi, and Omar Shallo.
The petitioners challenged the June election, arguing that the three Class A seats were not subjected to a separate vote by Class A shareholders. They said the government’s Class B voting strength could therefore influence seats reserved for minority investors. They also cited poll results showing substantially similar and high votes for leading candidates. However, Kenya Re opposed the case, arguing that it was a private corporate dispute improperly presented as a constitutional petition.
The court rejected the petitioners' argument, ruling that the presence of a State officer or public body as a party to proceedings cannot by itself determine the character of the dispute. The court noted that the immediate controversy remained whether the voting and election of directors at the AGM complied with the company’s Articles of Association, and whether the rights accorded to the respective classes of shareholders under those Articles were respected.
The ruling did not determine whether the June 19 election complied with Kenya Re’s amended Articles. It determined that the constitutional petition was not the proper route for resolving the complaint. The judgment says the Companies Act provides the statutory framework through which the shareholders’ grievances may be pursued. During the contested elections, Treasury removed four directors, including chairman Erick Gumbo, amid a board dispute, while the minority shareholders’ court challenge was pending.
Key points
- The High Court has struck out a petition by Kenya Re minority shareholders seeking to overturn the election of directors at the company's annual general meeting held on June 19, 2026.
- The court upheld Kenya Re’s preliminary objection against the suit, finding that the dispute concerned the company’s Articles of Association and shareholder rights, rather than a constitutional matter.
- The judgment says the Companies Act provides the statutory framework through which the shareholders’ grievances may be pursued.
