Keroche Breweries sues ex-MD Shollei, seeks Sh10b in damages to reputation

Keroche Breweries has sued former Managing Director, Sam Krus Shollei, over claims of causing reputational and financial harm to the company over a Sh75 million disputed debt

The Naivasha-based brewery moved to the High Court seeking Sh10 billion in reputation damages following what it terms an unlawful insolvency (liquidation) petition filed by Shollei.

In its petition, the brewer says Shollei’s petition for liquidation gazetted on August 21, 2025, has triggered panic among investors, clients, and stakeholders, undermining the company’s financial standing in the market.

According to court documents, the former MD filed the petition over an alleged Sh75 million debt, citing a prior judgment he had won against Keroche in the Employment and Labour Relations Court (ELRC) in 2019 for wrongful and unfair dismissal.

Shollei moved to the High Court on May 23, 2025 under the Insolvency Act, claiming that his former employer has failed or neglected to satisfy the judgment debt, despite repeated demands and the passage of nearly three years since the award was made by the Labour Court.

In its counterclaim, Keroche Breweries claims that Shollei acted maliciously and outside the law, alleging that his petition was intended to tarnish the company’s reputation and destabilise its business. 

The company asserts that the insolvency move filed by Shollei on May 23, 2025, was unfounded, reckless, and done without due consideration of the legal and commercial implications.  

The brewery’s lawyers, Advocate Karuku Wachira of Waruiru Karuku & Mwangale Advocates, say the liquidation petition had no legal merit and was filed in bad faith. 

The company says that Shollei ignored their appeal, which is currently before the Court of Appeal, which has challenged the Labour court decision before filing the liquidation petition. 

A certificate of urgency filed by the brewer highlights the potential economic consequences if the petition were allowed to proceed.

“The Respondent/Applicant (Keroche Breweries) is a major employer in Kenya's brewing sector, with over 500 direct employees and thousands in its supply chain, contributing billions in taxes and exports. Any insolvency threat is a potential economic disaster warranting urgent judicial intervention,” says Keroche CEO Edward Mwangi Muigai in an affidavit filed in court.

The court papers highlight several alleged irregularities in the statutory demand underlying Shollel’s petition. 

Notably, the Statutory Demand, dated June 30, 2025, was signed by the Deputy Registrar of the High Court at Nakuru, rather than by Shollei or an authorized agent, contrary to Section 384(1)(a) of the Insolvency Act, 2015 

“The illegality of the Statutory Demand invalidates the entire Petition, as liquidation proceedings cannot be founded on a defective document. Proceeding otherwise would perpetuate an abuse of court process,” the CEO adds

Keroche also emphasizes the reputational and economic harm it has suffered, including the fact that the media coverage of the petition had already sparked panic among stakeholders. 

The brewery, which sources raw materials from over 10,000 local farmers and contributes significantly to foreign exchange through exports, warned that the petition could disrupt national economic activity.

“The false insolvency narrative risks widespread economic disruption, including job losses and reduced government revenue, justifying urgent judicial intervention to prevent further dissemination and to award substantial damages of Kenya Shillings Ten billion,” Keroche says.

Keroche Breweries is now claiming Sh10 billion in damages, arguing that the malicious advertisement of an illegal liquidation petition caused significant reputational harm, market panic, and financial losses, including declines in brand value, projected revenue, and long-term investor confidence.

“Reputational damages are warranted due to the malicious nature of the advertisement on an illegal basis, with quantifiable losses in brand value, projected revenue declines, and costs associated with crisis management, justifying compensation in the sum of Sh 10 billion," seeks the brewer

The brewery is seeking urgent ex-parte orders to temporarily restrain Shollei, his agents, or anyone acting under his instructions from advertising or publicizing the liquidation petition in any media.

"Pending the hearing and determination of this application inter-partes, there be a temporary injunction restraining the petitioner, his agents, or any person acting under his instructions from further advertising or publicizing the Liquidation Petition or any related notices in the Kenya Gazette, newspapers, or any media," Kerocche says.

Further, the brewer seeks orders suspending the liquidation proceedings pending at the Nakuru Law Courts until the determination of its case.

"Pending the hearing and determination of this Application, there be a stay of the liquidation proceedings in the Petitioner's Liquidation Petition dated May 23, 2025 and any execution thereof," reads the application 

Keroche maintains that the balance of convenience favors the company, as SholleI would face no irreparable loss from the temporary stay, while the brewery risks severe reputational, financial, and operational damage.

The case is pending hearing in the High Court.