Court of Appeal stops transfer of disputed shares in Vipingo Ridge

The Court of Appeal in Malindi has temporarily stopped the transfer of the disputed multi-billion shares in the lavish Vipingo Ridge Golf Estate, Kilifi county, in a legal battle between company investors.

Justices Agnes Murgor, Kibaya Laibuta and Ngenye Macharia also temporarily stopped the interference of shares in Sunsail Trading Company Limited, a company that owns and manages the vast Vipingo Ridge.

The judges further stopped the transfer of shares in Vipingo Ridge and Vipingo Beach Limited until the hearing and determination of the suit filed by retired rally driver Alastair Mark Cavenagh against two brothers Christopher Gordon Horsey and David Horsey.

Cavenagh sued Christopher Gordon Horsey (1st respondent) and David Horsey (2nd respondent) and First European Finance Investment Limited (3rd respondent), a company that holds the shares of the three companies at Vipingo Ridge.

Cavenagh appealed a decision by Justice Murugu Githinji that dismissed his notice of motion to stop the brothers from interfering with the said shares in said companies.

The appellate judges said that any drastic changes in the governance, administrative and shareholding frameworks of First European Finance Investment Limited before the intended appeal is heard and determined would render the intended appeal, if successful, nugatory.

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“An injunction be and is hereby granted to restrain the 1st, 2nd and 3rd Respondents from dealing in any manner with the shares held by the 3rd Respondent in Sunsail Trading Company Limited, Vipingo Ridge Limited and Vipingo Beach Limited pending hearing and determination of the intended Appeal,” said Justice Murgor.

The driver said First European Finance Investment Limited is a Limited Liability Company incorporated in Mauritius and a Special Purpose Vehicle (SPV) that owns shares in Vipingo Ridge Limited, Vipingo Ridge Beach Limited and Sunsail Trading Company Limited whose shares were previously owned by David Mitchell.

The rally driver said that in 2004 he joined Mitchell to come up with the idea of developing a golf course at the Coast and incorporated a company to acquire the property with the two of them as equal shareholders.

He said that after acquiring the property, they invited the Horsey brothers as investors and went ahead to develop a world class golf club, club house and sold plots to about 310 homeowners.

Cavenagh told the court that a disagreement over management arose between Mitchell and the Horsey brothers compelling him to intervene to stop Mitchell from selling his shares to a third party.

The rally driver said that he convinced Mitchell to sell his shares to Horsey brothers and in exchange, they were to finance and enable him acquire 2/9 of the shares in the First European Finance Investment Limited.

He told court that he convinced Mitchell to sell his shares to First European Finance Investment Limited at Sh600 million (USD$ 6 Million) but successfully reduced the purchase price to Sh500 million (USD$ 5 Million).

Cavenagh told court that the Horsey brothers declined to transfer shares to him as agreed and that he only had a financial interest in the sale of the shares.

He said that upon payment of monies expended, the Horsey brothers agreed that he could transfer the shares to himself or any entity of his choice.

In his appeal, Cavenagh sought injunctive orders restraining the Horsey brothers from transferring or dealing with any shares held in Sunsail Trading Company Limited, Vipingo Ridge Limited and Vipingo Beach Limited.

He argued that the Horsey brothers are likely to put the companies share away from his reach and use them to the detriment of the companies if an injunctive order is not issued.

Cavenagh sought to know the amount the Horsey brothers owed from the purchase of shares in the three companies owned by David Mitchell.

The rally driver also sought for transfer and ownership of 2/9 of the shares in the three companies held by First European Finance Investment Limited.

Cavenagh also sought to have all shares held by First European Finance Investment Limited in the three companies be advertised for sale to the highest bidder.

He wants the court to issue an injunction to restrain the Horsey brothers from exercising any rights or casting any votes in First European Finance Investment Limited’s board and general meetings in respect of shares in the three companies.

Cavenagh also said that pending sale and transfer of First European Finance Investment Limited’ shares, the same be held in trust for his benefit or the company’s shareholders.

The rally driver said the Horsey brothers have since requested the First European Finance Investment Limited’ Trustees in Mauritius to produce documents relating to the transaction and asked him to sign some historic share certificates.

He told court the Horsey brothers have used the board seats acquired by virtue of FEFI shares to terminate the services of experts who had been responsible for the success of the Companies and replaced them with family members.

However, the Horsey brothers said the agreement dated May 10, 2018 did not contain any term or obligation for transfer of shares held by First European Finance Investment Limited to Cavenagh.

David Horsey said they only agreed with Cavenagh that he would receive a share of the profits arising from future sale of 2/3 of the shares, which sale was yet to take place.

The brothers argued that Cavenagh had no legal basis to seek orders of injunction to restrain them from dealing with the company shares which they beneficially owned.