Court clears way for sale of Rea Vipingo

The sale of Rea Vipingo Plantation can go ahead after the High Court on Thursday dismissed a case filed to stop the process.

Mr Justice David Majanja threw out a petition filed by Vania Investment Pool Limited against the Capital Markets Authority (CMA) saying giving the orders sought would amount to taking over the role of the regulator.

“From the facts of the case, I find the intended application as frivolous. It is hopeless and weak and therefore cannot succeed,” Judge Majanja said.

Vania Investment ought to have filed the case before the Capital Markets Authority tribunal established under the Act to handle complaint against the regulator’s decisions, noted the judge.

“The tribunal ought to have been the first port of call. Permitting the matter to proceed in this court would impose on the mandate of the tribunal,” Judge Majanja noted.

In its case, Vania Investment had accused CMA of breaching its own rules by imposing a deadline on making or amending of takeover offers of Rea Vipingo shares.

CMA had placed a deadline of February 28, this year.

“The direction is in breach of the regulation 13 of the capital markets which allows any competing offer in takeover scheme to submit its statutory takeover document at any time provided that it is done 10 days before the close of an offer,” Vania Investment said.

SCUTTLE PROCESS

In its response, the markets regulator read ill motive on part of Vania Investment saying its intention was to scuttle the process.

“The interest is to steal the show, let them not take the offer,” the markets authority noted.

In joint response, Rea Trading Limited and Centum Investments Limited urged the court to dismiss the case as Vania Investment “deliberately ignored the well-published and stipulated timelines.”

“The application is not brought in good faith. It is intended to steal a match on other parties who have strived to comply with the CMA regulations,” the two who have placed their bids to make a takeover noted.

In his ruling, Judge Majanja said Rea Vipingo shareholders were entitled to have the process come to an end so that they can make decisions regarding their shares.

“At the end of the day, they are entitled to accept or reject the offers. Permitting these proceedings would cause considerable doubt on the process already underway,” he observed.

The judge stated that he had noted the concerns of other bidders whose wish is to have the best price on the table for consideration.

“Such a price can only be achieved within the framework and regulations set by CMA and not by an open-ended process that stifles their decision-making and denies them the opportunity to access information available to make their choices,” the judge said.

He added that he was required to weigh the company’s interest against the public interest and that by the court sanctioning the process, it may dent and diminish investor and public confidence on the capital markets.  

Justice Majanja said that endorsing the application may throw away the take-over that had been in the works since November 2013.

“The application  is therefore refused and dismissed,” he said.