Peter Munga loses bid to block Britam shares auction over $3.35 million loan

Key Points

• Kenyan court lifts order blocking ABC Bank from auctioning Peter Munga’s Britam shares to recover $3.35 million in loans.
• Munga’s attempt to withdraw a previous case was dismissed for failing to disclose a similar suit, deemed an abuse of court process.
• Munga faces ongoing financial struggles as assets, including Britam shares, are at risk due to unpaid loans linked to Equatorial Nut Processors.

A Kenyan court has lifted an order blocking ABC Bank from auctioning Ksh75 million ($560,000) worth of Britam Holdings shares owned by Equity Bank Group founder Peter Munga. The bank is seeking to recover Ksh433.76 million ($3.35 million) in loans owed by Equatorial Nut Processors Limited, where Munga holds a controlling interest.

Justice Dorah Chepkwony revoked the temporary orders Munga had secured in February after it emerged that he failed to disclose a similar application had already been dismissed by another judge at the Milimani Court in Nairobi on Jan. 29. “Mr. Munga approached this court without disclosing that he had filed a similar suit seeking the same reliefs before another court,” she said. “This conduct amounts to an abuse of the court process and warrants immediate intervention.”

After the issue came to light, Munga moved to withdraw the earlier case. But the judge dismissed this attempt, noting that withdrawing the first suit didn’t erase the fact that he had failed to disclose it in the first place. “This court is duty-bound to protect the sanctity of its process and cannot endorse conduct that undermines the fair administration of justice,” she added.

With the court order lifted, ABC Bank is now free to auction the Britam shares pledged as collateral to recover the unpaid loan. In an earlier ruling, High Court Judge Alfred Mabeya pointed out that Munga had personally guaranteed the loan and willingly offered the Britam shares as security. “Having signed a personal guarantee and indemnity, he is legally bound to fulfill the debt obligation after the company’s default,” the judge ruled.

Court rejects Munga’s case arguments

Equatorial Nut Processors, based near Maragua Town in Murang’a County, is a long-established enterprise that processes macadamia nuts, peanuts, and cashew nuts. The company reportedly employs more than 1,000 workers.

Munga had tried to argue that the case pending at Milimani was different in nature and reliefs sought. But Justice Chepkwony rejected that argument. “The pleadings clearly show that the reliefs being sought in both cases were substantially the same—meant to stop the seizure and auction of the shares,” she said.

She criticized what she described as “forum shopping”—filing the same case in different courts hoping to get a favorable ruling. “This amounts to an abuse of court process,” the judge stated. “It’s not acceptable for a party to file similar suits across different courts, hoping one will eventually go their way. Such behavior is misleading and risks conflicting decisions.”

Peter Munga battles debt as assets face risk

This is not the first time Peter Munga has faced financial difficulties. In 2023, creditors moved to auction some of his multimillion-shilling properties to recover unpaid debts.

Legacy Auctioneering Services listed two vacant commercial plots in Murang’a County, each 0.36 acres, for auction. Munga avoided a similar situation in 2017 when he made a last-minute payment to Jamii Bora Bank to prevent the auction of five residential houses in Nairobi’s Kasarani area, then valued at Ksh400 million ($2.72 million).

His current financial challenges stem from credit facilities extended to him and his associate, James Karanja. These facilities, backed by guarantees from their companies, Equatorial Nut Processors and Meru Ginnery, now face the threat of asset seizures. His dealings have attracted scrutiny in the past. In 2021, a Mauritian commission of inquiry flagged a controversial 2016 transaction in which Munga acquired 452.5 million Britam shares from the Mauritian government.

The deal reportedly caused the country a Ksh3.9 billion ($35.9 million) loss due to allegations of undervaluation. At the time, other bidders, including South Africa’s MMI Holdings and Barclays Bank (now Absa Group), had offered up to Ksh11 billion ($101.24 million) for the stake. Munga initially pledged to match that figure but ultimately bought the shares for far less.

In subsequent years, he began offloading his Britam shares. In 2017, he sold 104 million shares in the open market, followed by the sale of 348.5 million shares to Swiss insurance giant Swiss Re in 2018. These deals are believed to have earned him billions in capital gains.