A full bench of the Kenyan Appeal Court has halted plans for a second valuation of Bluebird Aviation (Kenya) (BBZ, Nairobi Wilson) as requested by one of its founders following a buy-out dispute with other shareholders, reports Business Daily from Nairobi.
In April, the High Court had ordered international accounting firm PricewaterhouseCoopers (PwC) to conduct a fresh valuation of the company after founder Adan Abdi Yusuf rejected KES320.9 million shilling (USD2.2 million) as the correct value of his 25% stake in the company. High Court Commercial Court division Judge Njoki Mwangi had questioned the independence and transparency of the initial valuation report compiled by RSM (East Africa) Consulting Ltd on behalf of Yusuf's partners who are former Kenya Air Force officers Hussein Ahmed Farah and Hussein Unshur Mohammed, and pilot Mohammed Abdikadir Adan, who each own 25% of the company.
However, Hussein Unshur Mohammed took the High Court order to the Appeal Court, arguing that his partner Mohamed Abdikadir Adan had already deposited KES320,912,500 (USD2,255,153) into a judiciary account and a share transfer had already taken place. Meanwhile, Hussein Ahmed Farah had already sold his shares to a third party based on the initial valuation.
Appeal Court judges Daniel Musinga, Hellen Omondi, and Ngenye Macharia agreed that "a party cannot be allowed to maintain an advantageous position that he has gained from a flawed decision because he is able to pay damages," Business Daily reports.
The airline was founded in 1992 to transport khat to Somalia - a stimulant native to the Horn of Africa and the Arabian Peninsula. Yusuf later accused his partners of sidelining him from management and filed multiple lawsuits until three years ago when the court directed his partners to buy him out. The valuation was to facilitate this buy-out.
