Kenyan court returns lucrative fintech firm to Rwandan investor
The Kenyan High Court has ruled that Rwandan businessman Desire Muhinyuza owns fintech startup Stay Online Limited (SOL).
Muhinyuza had gone to court to reclaim control of the $2.6 million (Ksh.400m fintech startup from another Kenyan businessman, Koome Kirimi, whom he accused of failing to register him as the sole owner of the company.
In court documents, Muhinyuza claims to have chosen Koome as its SOL's agent in Kenya. He claims his nomination was owing to the difficulties foreigners encounter in complying with Kenya's Banking Acts.
Karimi was to assist in the registration of SOL in Kenya, and the Rwandans had even gone so far as to fund the company's foundation and activities, sending the initial $29,000 cash from Rwanda.
Stay Online Limited was subsequently registered in Kenya in April 2023.
Muhinyuza, however, claims Karimi failed to register him as the company's beneficial owner.
This, he argued in the court, was bad faith because Karimi he knew Muhinyuza did not have a proper immigration status at the time he registered SOL.
Muhinyuza had also asked the court for an order requiring the Registrar of Companies in Kenya to remove Karimi as a signatory to the company's bank accounts at the United Bank of Africa.
He also sought the courts to impose an order directing Karimi to refund the $100,000 he claims to have gained, as well as a permanent order prohibiting Karimi from completing any transactions on SOL's bank accounts.
Kenyan Justice Alfred Mabeya ruled that Muhinyuza was the legitimate owner of Stay Online Limited (SOL).
"Accordingly, I find and hold that the first plaintiff (Muhinyuza) is the company's beneficial owner.The first defendant (Kirimi Koome) committed fraud by failing to properly fill out the form for beneficial ownership at the time of the company's incorporation," Justice Mabeya wrote in his decision.
"He (Muhinyuza) controlled its operations and Karimi was only his front waiting for the first Plaintiff's immigration status to be regularized."
Karimi was also ordered to repay $100,000, which he allegedly obtained from the Rwandan investor for tax purposes but pocketed instead. The judge also required him to pay interest on the $2.6 million.