HIGH COURTS SENDS DISGRUNTLED KQ SHAREHOLDER PACKING
The High Court in Nairobi dismissed with costs the application of a small, if not minute shareholder in Kenya Airways to stop the ongoing share rights issue, when it sent a Mr. Rakesh Gadani into the legal cold. While granting him the right to sue, a principal right enshrined in Kenyas constitution even if later found frivolous, the High Court effectively sided with the company to let the ongoing share rights issue go ahead.
Gadani apparently had contended that his share holder rights would be infringed if he were unable to take up the share rights offer, as his value of shares held would shrink, also claiming that shareholders did not have ample opportunity to question the board over their decision to propose and implement the rights issue. However, if memory serves right, the matter was put to the last Annual General Meeting of the company in which shareholders approved the proposals made by the board, and all regulatory hurdles have since been taken with the mandatory approvals granted by the Capital Markets Authority, before the rights issue could be launched.
Aviation analysts have dismissed the case as a mere nuisance suit by a disgruntled shareholder who might be best served in his interests if he would divest altogether instead of pursuing what is expected to be a costly and futile case against the company, and with the share rights issue now going into its third week, the process is expected to be completed and concluded as anticipated. Kenya Airways seeks to raise about 250 million US Dollars as seed money to finance the airlines ongoing expansion plans and pay for the acquisition of additional new aircraft which will see the fleet size first double by 2015/16 and then triple by 2020/21 at which time The Pride of Africa intends to fly to all key commercial centres on all continents with a network of 115 destinations. Watch this space.