Business

Safaricom bosses face contempt in Sh7.7 million insurance claim

Companies

Wednesday December 14 2022

Ndegwa

Safaricom PLC CEO Peter Ndegwa during the telco’s half-year results at the Michael Joseph Center. PHOTO | DIANA NGILA | NMG

Senior officials of the country’s leading mobile telephone operator Safaricom could be in trouble after an Embu man sought a court order to punish them for refusing to release Sh7.7 million he is claiming from troubled insurance firm Invesco Assurance.

Ephantus Mbogo Njuki wants directors of Safaricom including the chief executive officer Peter Ndegwa, Dilip Pal, Winfred Ouko, and Linda Muriuki among others jailed for six months for refusing to surrender the money as directed by the court.

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Safaricom operated an Invesco account through a Paybill number and Mr Mbogo attached the account to recover a compensation claim of Sh7.7 million.

The businessman says he obtained a garnishee order (a legal notice to a third party to surrender money) to settle his claim against Invesco Assurance.

Embu senior resident magistrate H. Nyakweba said in the ruling that he does not see why the corporate veil (holding shareholders or directors personally liable) should not be lifted and hold the directors in contempt of court.

“In the upshot, I allow the application dated 03.11.2022 as prayed. As a result, I issue a warrant of arrest against all the directors of Safaricom PLC,” the magistrate said on December 8, 2022, adding that the directors should be presented before him as soon as possible but not later than January 10, 2023.

Mr Mbogo told the court that he served the order upon Safaricom on October 4, directing the telcos to release the money but the company has refused to comply.

The magistrate noted that although Safaricom representatives were not in court when the garnishee order was issued on September 29, the company was served with the order through an email.

He said going by the precedent set by the Court of Appeal, Safaricom was duly served.

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“Despite having been served with the said order, the application subject to this ruling as well as the order of 09.11.2022, the garnishee (Safaricom) did not find it fit to participate in this proceedings and explain itself. I find this to be a blatant violation of court orders,” he said.

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Jay Ndungu

Jay is a computer scientist and journalist with a passion for the intersection of technology and society. He has a background in computer science, developing a deep understanding of the technical aspects of the industry, including programming languages and software development methodologies. Currently, He writes for Nairobi Times, covering a wide range of topics including technology, politics, sports, and entertainment. With his unique combination of technical knowledge and journalistic experience, Jay brings a unique perspective to the stories he covers, able to explain complex technical concepts in an easy-to-understand manner. His work is dedicated to bridge the gap between technology and society, and to make people more aware of the potential of technology to make the world a better place.

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