He gave maize worth Kes20,000 as seed capital, now wants Kes19b stake in Naivas

4 minutes

Newton Kagira Mukuha—the rabble-rouser son of Naivas founder Peter Mukuha Kago—has for the last 11 years been fiercely fighting for a stake in the giant supermarket.

Mr Kagira, Kago’s eldest son insists that he is a bona fide shareholder of Naivas Supermarkets, having contributed to its establishment in Rongai, Kajiado County, some 33 years ago.

He insists that his brothers—led by the current Naivas Limited MD David Kimani and its late chairman Simon Gashwe—have for long sidelined him from the shareholding of the retail giant including shares left behind by their late father.  

Unlike the two brothers who he says gave nothing to start the retail store in 1990, Kagira claims to have contributed 20 percent of the company’s seed capital when it was being established back in 1990 as a small corner shop in Rongai.

His seed capital, Kagira told the court in a succession case in 2016, was maize worth Sh20,000.

Given that the heirs of the late Peter Mukuha Kago sold a 31.5 percent stake to a consortium led by Amethius Retail at Sh6 billion, Kagira’s claim to Naivas would work out to around Sh19 billion.

In the same breadth, Kagira wants a fifth of the Sh6 billion that the heirs of Naivas’ founder sold to Amethis Retail – a consortium which comprises International Finance Corporation, German fund DEG and private equity firms Amethis and MCB Equity Fund.

This means he is clamouring for Sh1.2 billion as part of the proceeds that Mukuha family, through its investment vehicle Gakiwawa Family Investments, received from the disposal of their shares in Naivas International Limited. Naivas International Limited, registered in Mauritius, owns Naivas Kenya Limited. 

However, the High Court has since ruled that Kagira is a stranger in Naivas, their father having left him no shares in the retail store. 

He has appealed the ruling in the Court of Appeal. 

Mr Kagira recalled that in 1989 their father called his children with a view to bringing them together to do business. Joram Kamau, a brother of Kago and founder of Tuskys Supermarkets, offered to help him start a business.

All of them agreed to make contributions which started flowing into the common pot in April 1990. 

Newton Kagira Mukuha/Photo: BD

Mr Kago is reported to have contributed Kes 30,000. The two daughters Grace Wambui and Linet Wairimu are said to have contributed Kes 25,000 and Kes 15,000 respectively. David Kimani, Kagira said, gave Kes 10,000.  

Thereafter, on June 1, 1990, Joram invited his brother to take over a shop that was at Rongai. 

The shop, recalled Kagira, was stocked. Joram was to be paid in due course as the business became profitable. Since Kimani and Gashwe worked at Joram’s shop and knew how the business was run, they took leadership roles, said Kagira.

At the time, Wairimu was a nurse at Ol Kalou, Grace worked at the National Youth Service, while Kago and Kagira were farmers at Cherangani.

After taking over the shop at Rongai in 1993, Simon and David allegedly registered it as a company calling it Rongai Self Service.

In 1996, a branch was opened in Naivasha, where Naivas was born. Kago asked Kimani to go to Naivasha.

In 1996, a branch was to be opened in Naivasha, Kimani was to go to Naivasha. 

Kagira recalled that on 31st October, 1996, Kago convened a meeting which was to be attended by only the children who contributed to the business.

“However, Kimani was present even though he had not contributed. In that meeting, the objector (Kagira) was given the Rongai house. The objector was in agreement with the resolutions,” reads a court document.

However, Gashwe and Kimani countered, noting that Kagira was lying.

They noted that the disgruntled sibling was the biggest beneficiary of the family’s wealth distribution arrangement. 

He is said to have been given a plot in Rongai, with his eldest son being awarded a three-acre farm with a farmhouse in the same place. His daughter was given shares of cash in the bank as well as Kagira.

But they also accused Kagira of being a lone ranger. “He has been doing things separately and is not on good terms with the others,” said the late Simon Gashwe.

Mr Gashwe noted that the family had tried its level best to assist Kagira. 

“They have educated all his children. Four of his children are employed at Naivas Limited. A business was started for him in Nairobi. He refused to pay for goods advanced to him,” explained Gashwe.

Kagira has a supermarket in Kayole, Nairobi. 

Kagira first moved to the High Court in November 2012 to stop the distribution of his deceased father’s wealth until the ownership of Naivas Limited was determined. He lost the case in a ruling that was made in 2014.

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