Citizen TV billionaire S.K Macharia is in a protracted battle to take over his late son’s company.
John Gichia Macharia died in 2018 in a road accident along the Southern bypass, he died while receiving treatment at Karen Hospital.
He was a major shareholder of the company.
On September 4, John’s father, the media mogul, declared himself the chairman and director of the troubled DirectLine Assurance Company and took over its management.
According to a letter seen by Mpasho.co.ke, Macharia wrote a letter to the company’s staff stating that he was made the decision ‘in the interest of preserving the company’.
“I write to you in my capacity as a representative of the majority shareholders, namely Royal Media Services, Royal Credit Limited, S.K Macharia, P.G Macharia [SKMacharia’s wife Purity] and the estate of the late Dan Karobia,” read the letter.
The first major declaration made in the letter saw the suspension of Terry Wijenje who was the Managing Director, CEO and principal. She was replaced by Isaac Ngaru in an acting capacity.
“I take over the position of director and chairman. All staff should report to their respective offices and continue with their duties as normal,” Macharia added.
The company’s other directors are Geoffrey Radier, Kevin McCourt, James Gacoka and Elizabeth Waichigo.
However, the insurance regulator has instructed shareholders of Directline Insurance Company Limited that they risk legal action if they fail to comply with the authority’s directive.
In a letter addressed to the shareholders, the Commissioner of Insurance and IRA chief executive Godfrey Kiptum pointed out that the alleged appointment of a chairman of the company is irregular and in contravention of the provisions of the Insurance Act.
“The purported appointments of chairman, directors and CEO is against the provisions of the Insurance Act and the Corporate Governance Guidelines which require that such a person be approved by the commissioner before they can take up those positions,” he said.
Adding, “The authority does not recognise any purported action taken to control the affairs of the insurer outside the legal framework and hence such actions are null and void.”
In its commencement in 2005, the company created itself as the largest PSV underwriter in the country with a market share 60 per cent at the end of the year 2015.
However, its troubles have seen the firm make a loss of Sh32,921 million period between July and September 2018.
During the period it only held a 2.09 per cent share of the total premium held by the general business insurance companies, according to IRA.