Failed marriage is no reason to liquidate a healthy company, judge rules

A Nairobi couple's failed marriage will not cost them their company, the High Court has ruled, after a judge dismissed a woman's bid to have the firm she jointly owns with her estranged husband wound up.

Justice Rhoda Rutto threw out a petition by Joan Catherine Wangui Change, who had asked the court to close down Rak Limited and share out its assets between her and her husband, Robert Marekia Gethenji.

The two are the company's only shareholders and directors, each holding a single share. But their marriage has broken down, and with it, their ability to run the business together. Joan told the court that Robert had locked her out of the company's affairs from July 2024, cutting off her access to information, assets, finances and decision-making.

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She said she could no longer help find tenants for the company's property, and that the resulting standstill had left her exposed to possible penalties should the company fail to meet its obligations. She wanted the court to close Rak Limited, appoint an Official Receiver to take over, and have its assets sold and divided between them.

There was just one problem: Rak Limited was not broke. Both sides agreed the company was financially sound and debt-free. Its main asset is House No. 41D at Waridi Gardens, Kihingo village, and Joan also pointed to motor vehicle KCJ 795D as belonging to the company.

Robert opposed the petition, arguing that the dispute was about the couple's personal differences and not the company's finances. He said Rak Limited had been set up to hold a house that came to him through a family property development arrangement, and that Joan was made a shareholder only because the law at the time required a private company to have at least two.

He maintained she had contributed nothing towards the company or the property, and that the house was his, with the company simply holding it on his behalf. Rak Limited, he added, was still running normally and had no reason to be shut down.