IRA, media mogul embroiled in tussle over matatu insurance company

Two
people have been arraigned in court in connection to Royal Media Services owner
SK Macharia’s bid to take over a matatu insurance company.

Anthony Macharia and Bashir Ahmad Mburu have been charged with obstructing an inspection officer from conducting an inspection as required by the IRA.

Money, power play

The two have been caught up in a power play involving SK Macharia and the IRA over the appointment of new Directline board of directors.

Macharia and Mburu were arrested by police officers attached to the insurance fraud investigation unit on Friday and appeared in court on Monday.

IRA has rejected the appointment and communicated the same to Macharia and other interested parties.

On
September 5, the IRA
instructed the shareholders of Directline Insurance Company Limited to stop
with immediate effect any physical involvement in the operations of the insurer.

IRA
Commissioner of Insurance and CEO Godfrey Kiptum directed the shareholders to
comply with the Authority’s directive failure to which regulatory action
provided under the Insurance Act would be taken.

In
a letter addressed to the shareholders, the Commissioner 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 persons be approved by the Commissioner before they can take up those
positions,” he said.

The
Commissioner further explained that the above requirement spells out the requirements
for directors and management of insurance companies and the approval process to
be followed.

Control of an
insurance company

He
pointed out that the ultimate responsibility to have control over an insurance
company is vested on directors who have been approved by the Authority and that
the purported actions are outside the legal framework and thus considered null
and void.

“It
is only the approved directors that have the ultimate responsibility to have
control over an insurer and the Authority, therefore, 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,” he said.

By
way of information, the Authority, in a bid to find a solution to the corporate
governance issues affecting the company, has intervened in the management of the
insurer as provided for under the Insurance Act by appointing three directors
to the board of the insurer.

The
Authority is mandated to protect the interests of consumers and insurance beneficiaries
and the actions taken towards the management of Directline Insurance Company
Limited are towards ensuring that the corporate governance issues the insurer
is facing do not affect the insurance policyholders and beneficiaries.

Governance issues

IRA
has been making efforts to find a solution to the corporate governance issues
affecting Directline Insurance, including intervening in the management of the
insurer as provided for under the Insurance Act by appointing three directors
to the board of the insurer.

The
Authority says it is mandated to protect the interests of consumers and
insurance beneficiaries and the actions taken towards the management of
Directline Insurance are towards ensuring that the corporate governance issues
the insurer is facing do not affect the insurance policyholders and
beneficiaries.

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