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Directline Assurance ceases operations amid ownership dispute

Brian Murimi by Brian Murimi
September 15, 2024
in Business
Reading Time: 2 mins read

Directline Assurance Company Limited has abruptly halted its insurance operations, citing severe disputes over its ownership and fraudulent documentation as primary reasons.

The move, effective immediately, signifies a significant upheaval in Kenya’s insurance sector, with Directline’s current operations ceasing and all related insurance transactions suspended.

In a formal notice issued on September 10, 2024, Directline announced its decision to terminate all insurance activities. According to the company, the cessation is due to ongoing issues with fraudulent CR12 documents that do not accurately reflect the company’s true ownership. The dispute centers around allegations that the Insurance Regulatory Authority (IRA) has overlooked fraudulent activities related to these documents.

Directline’s letter, sent on behalf of its rightful shareholders, notably Royal Credit Limited, accuses IRA of negligence, asserting that the authority has permitted the continued use of the fraudulent CR12 documents. These documents, purportedly issued through illicit means, have misled the courts and undermined the legitimate shareholders’ interests.

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The company’s notification instructs the Association of Kenya Insurance Companies (AKI) to halt the issuance of any insurance certificates or stickers in Directline’s name from the date of the notice. Furthermore, Directline has informed all associated banks that the CR12 currently in circulation is fraudulent and does not represent the company’s legitimate shareholding or directorship.

Directline’s grievance highlights a deeper issue within the Kenyan insurance sector. The company claims that the fraudulent CR12 has been used to mislead judicial rulings and has implicated them in financial losses exceeding KES 7 billion. Of this amount, KES 2.3 billion was allegedly transferred to a UK-based entity, AC, contrary to the Insurance Act’s stipulations.

Royal Credit Limited, which claims to be one of the true shareholders, has documented the alleged fraudulent transactions and made these records available through an online link provided in their statement. The matter has been escalated to various high-level officials, including the Head of Public Service, the Treasury Cabinet Secretary, and the Central Bank Governor, among others.

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Brian Murimi

Brian Murimi

Brian Murimi is a journalist with major interests in covering tech, corporates, startups and business news. When he's not writing, you can find him gaming, watching football or sipping a nice cup of tea. Send tips via bireri@thesharpdaily.com

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