- Many Kenyans woke up jobless following the decision made by S.KMacharia to dissolve DirectLine Assurance company. The company has been in the limelight for contention following the will of Macharia's deceased son, John Gichia, stating that all property, including shares in Direct Line, be given to his son Adam. The fate of Adam the grandson remains unknown, while the future of jobless Kenyans is uncertain.
Direct Line Assurance, a prominent insurance firm in Kenya that commands the lion's share in motor commercial public service (PSV), has abruptly ceased its operations.
Many Kenyans woke up jobless following the decision made by Samuel Kamau Macharia, the chairperson of Royal Credit Limited. Direct line assurance has been in the limelight for contention following the will of Macharia's deceased son, John Gichia, stating that all property, including shares in Direct Line, be given to his son Adam.
In a statement, Macharia dismissed all employees, effective immediately. Following this controversial decision, he dissolved the board of directors and terminated their contracts. He also added that Direct Line will no longer issue insurance services. Royal Credit Limited is set to take over all assets owned by Direct Line Assurance.
According to S.K Macharia, the closure of Direct Line Assurance was prompted by the Insurance Regulatory Company (IRA) freezing the company's bank account.
The closure of the firm has raised eyebrows following Macharia's forced involvement in Direct Line Assurance operations in 2019 after the death of his son, John Gichia. S.K Macharia declared himself the Chairman and director of the company. IRA cautioned his involvement but fell on deaf ears because he was determined to take charge.
"The purported appointment of chairman, director, and CEO is against the provisions of the Insurance Act and corporate governance guidelines, which require such a person to be approved by the commissioner before they take such positions," said Godfrey Kiptum, CEO of IRA said.
John Gichia, the deceased, was the executive director of the Direct Line Assurance Company that the tycoon attempted to take over. As the drama unfolded, Macharia proceeded to court to have a custodian of his grandson following his father's death.
The court declared Adam Kamau Gichia, son of the deceased, as the apparent heir according to his father's will under Section 38 of the Law of Succession Act. Adam owned 600,000 shares in AKM Investments Ltd, Kyuna estate L.R No. 209/7799. He also has Mugumo Estate L.R. No. 7752/258, Kibarage Estate L.R No. 7752/258, and 3.7 million shares in DirectLine Assurance Limited.
Proceeding to court, Macharia showed an embroiled fight for inheritance, questioning what more the billionaire wanted.
The court declared that Macharia only holds 9.6 per cent of ordinary shares in a direct line through Royal Media Services while the son John Gichia holds 90 per cent.
The closure threatens the young Adams' inheritance and dismays the transport industry. With the current economic situation and job market, jobless Kenyan employees are set for a rough patch.
The online community has greatly condemned the decision, faulting it on Macharia. Some regard it as a staged coup against his son. Others reason with him, calling him a businessperson propelled by profits.
Direct Line joined the Kenyan market in November 2005 and stood at ksh4.1 billion as income in the 2022/2023 fiscal year. While announcing its profits earlier this year, it outlined its ambitious plans to diversify its products.
The fate of Adam the grandson remains unknown, while the future of jobless Kenyans is uncertain.
