Blow to Amaco as judge gives nod to liquidation
Africa Merchant Assurance Company Ltd (AMACO) has suffered a major blow after the High court ordered its liquidation.
Justice Margaret Muigai ordered the liquidation of the insurance company under the supervision of the official receiver.
“Africa Merchant Assurance Company Ltd (AMACO is hereby liquidated under supervision of the official receiver and liquidator and subsequently the company be wound up,” the judge directed.
Muigai further ordered the company directors to personally satisfy such liabilities of the company as shall remain outstanding and owned after liquidation of the company.
This is after Elizabeth Karithi, Anisia Muthoni, Faith Muthoni, Silas Kinoti, Abel Mwaniki and John Mwangi moved to court seeking that Africa Merchant Assurance company be liquidated under the supervision of the official receiver and liquidator and subsequently the company be wound up.
They also sought that the directors of the company be ordered to personally satisfy such liabilities of the company as shall remain outstanding and owing after liquidation of the company.
They argued that the insurance company has failed to honour its obligation to pay the full decretal sums and costs as ordered by the court.
As at the date of this Petition, it has failed and/or refused to make reasonable payments of the decretal sums since the date of the statutory notice date of the said judgments.
Through lawyer Karingi Mugendi, the five told the court that the judgment was entered in their ‘ favour in the various courts directing the company to pay the Petitioners a total sum of Sh10,235,552.17 million plus costs and interest.
They said that the judgments and decrees have been served on the company and have never been set aside nor appealed against to date.
Petitioner’s attempts to realize the decretal sum by inter-alia taking out execution proceedings and warrants of attachment and sale of the company’s movable property have all come to naught as the auctioneers have returned the warrants unexecuted.
The warrants have been attached to the verifying affidavit of Elizabeth Wawira Karithi in support of this petition.
“To date, the decrees remain unsettled and continues to accrue interests and no plausible reason in law has been given by the company for failing to pay the decretal sum.
Indeed the company’s directors have adopted a rather carefree attitude and appear to abuse the Petitioner’s goodwill in the matter”, they told the court.
They added that the decretal sum is not disputed and has been due and payable in full since the decrees were issued and the statutory notice dated February 6 served upon the company.
The company has despite several demands, including insolvency statutory notice dated February 6 refused or neglected to pay the decretal sum.
“It is clear that the company is unable to pay its debts and it is just and equitable that the company should be wound up in the interest of Justice”, Mugendi told the court.
The company has previously been accused of late settlement of claims with the industry regulator, saying the firm closed last year with several clients complaining over non settlement of their claims.
High customer complaints
According to the Insurance Regulatory Authority’s (IRA) 2019 report, Amaco - along with Invesco Assurance - closed the year with the highest cases of customer complaints due to delayed settlement.
During the last financial year, Amaco realised a Sh75 million after-tax profit mainly boosted by lower operating costs with liabilities decreasing 17 per cent to stand at Sh1.8 billion compared to Sh2.1 billion the previous year.
The company, headed by Ms Elizabeth Koskei, fell into financial troubles that saw it delay in settling claims, pushing some creditors to use auctioneers to press for payments in mid-2019.