Naivas Founder Estate Dispute: A son’s 13 Years Fight to Administer Multi-billion Estate

For over a decade, Newton Kagira Mukuha, one of the children of the Naivas supermarket chain founder, has been fighting to administer the vast estate.

The dispute over the estate started following the demise of their father on May 6, 2010.

Kagira’s efforts have since failed to bear fruit. Recently, a court in Nakuru dismissed a petition he had filed in a Nakuru court seeking to be named the administrator of the estate of his late father, Peter Mukuha Kago.

Kagira had filed an application seeking to replace his deceased brother, Simon Gashwe, who had been named an administrator.

Gashwe was appointed the administrator of the estate on October 6, 2016. He passed away on August 26, 2019.

Kagira filed his case in 2022, while Grace filed hers in 2023. His sister, Grace Wamboi, and brother, David Kimani, also filed applications to replace Gashwe.

Justice Heston Nyaga, while ruling on the applications, dismissed the application by Kagira, noting a conflict of interest.

The judge noted that Kagira admitted that he had cases pending at the court of appeal against the late executor Gashwe and questioned what would become of the cases pending in the court should he be made the administrator of the estate.

“He will be left wearing the shoes of the appellant and respondent spontaneously and the applicant and respondent spontaneously. There will be a conflict of interest,” stated the court.

Grace and David were, however, named as administrators, with the court noting the estate was split into two.

Objection

Kagira in 2012 objected to a petition by his late brother (Gashwe) saying he was unfit to administer the estate. He at the time wanted the court to issue temporary orders barring Gashwe from interfering with NAIVAS LTD shares owned by their late father.

He said Gashwe had resolved to sell the shares owned by their father.

Kagira said Gashwe was unfit to administer the estate as he was fraudulently adding that he took Sh1 million shares on diverse dates in 2009.

He added that on April 30, 2009, Gashwe took another Sh2 million from the estate, and on July 14, 2009, he caused him (Kagira0) to purchase a banker’s check for Sh355,765 for an insurance company from the estate.

Kagira further stated that in August 2009, Gashwe took another Sh2 million from the estate and that he disclosed a net worth of Sh100,000,  yet he knew the estate was worth over Sh15,000,000.

He told the court that their late father convened a family meeting in 1989 and another meeting in 1990, at which funds were contributed, with which Rongai Self-Service Stores Ltd. started progressively opening other branches in Elburgon and Naivasha.

Kagira said he was in charge of the Rongai Branch and the Gashwe in charge of the branch at Elburgon.

He said he contributed Sh20,000, their late father contributed 30,000, his sister Grace Sh25, 000, Linet Wairimu Mukuha Sh15, 000 and David Kimani Sh10, 000.

Battle of supremacy

Kagira then said he is a shareholder of Naivas Limited and a beneficiary in the estate of his late father, and cannot be excluded as an elder son, as this would be contrary to Kikuyu culture.

He said the late Gashwe and the Board of Naivas could not sell the shares of Naivas Limited to MASSMART of South Africa without involving him.

The late Gashwe acknowledged in his response that their father had 10,000 ordinary shares or 20 per cent of the capital in NAIVAS LTD, and which shares were to be distributed by his will.

He stated that he was to get 4 per cent of the shares, while David was to get 4 percent. Grace and Linet Wairimu were to get 6 per cent each. He dismissed claims that there were plans to sell the shares of Naivas Limited.

Judge Anyara Emukule in a ruling delivered on October 31, 2014, ruled that Kagira was not a member of Naivas Limited. His father was however a member or shareholder of the company at the time of his death in May 2010 and his 10,000 shares unless first distributed before his death formed part of his estate and will be distributed, in the event of intestacy, equally among all his children surviving him.

The Parable of the Talents (Matthew 25:14-30)

Kagira was likened to the parable in the synoptic Gospels of the rich man, who upon embarking on a long journey summoned his three stewards and gave each one of them a sum of money, no doubt according to their respective abilities.

“In my view, and by the totality of the evidence on record, the family business originally funded by the joint financial efforts or contributions of family members (excluding Gashwe according to Kagira), and operated or managed under the style or name of RONGAI SELF-SERVICE STORES LIMITED, with branches in Rongai, Elburgon and Naivasha ceased to be a family business upon the signature by family members of the Resolution on 31st October 1999,” stated the judge.

Judge Emukule noted that Kagira was given the business at Rongai along with a house. Gashwe and his sister were given a house and a business at Elburgon, and David Kimani Mukuha and Linet Wairimu were given the business at Naivasha.

“Gashweand his brother David Kimani Mukuha, and their sisters Linet Wairimu and Grace Wamboi Mukuha, are like the two faithful stewards, in the parable of Matthew, who invested well the sums of money given to them by the master and doubled his profits, and were commended by their employer or master upon return from his travels, and made them part or members of his enterprise,” read the ruling by Judge Emukule in part.

What did Kagira do with his inheritance?

The ruling further read: “On the other hand the Objector is like the third servant who having been entrusted with his sum of money, dug a hole and kept it there until the return of his master, and told him how fearful he was to invest his money lest it be lost, more particularly knowing that the master reaps where he does not sow or plant, and gather crops where he has not scattered seed.”

Judge Emukule said Kagira was given his inheritance by his father a business store and a house and knows what he did with it.

“He may have run it down. Notwithstanding this, he has not, unlike the unfaithful biblical servant, been left out to gnash and grit his teeth. The Petitioner and no doubt with the concurrence of other members of NAIVAS LTD has helped set the Objector up with another store, “GREENMART” at Kayole estate in Nairobi,” read the ruling.

The judge said Kagira has no interest, legal or equitable in NAIVAS LTD.

Kagira’s interest in the 10,000 shares held by their father in NAIVAS LTD, the judge said was co-equal with that of Gashwe and other children of the late Peter Mukuha Kago, and even then, only upon intestacy and dismissed his application.

The case is pending in the Court of Appeal.

End…