Court allows ABC Bank to auction Munga’s 75M Britam shares over Sh433M loan default, deepening debt woes for Equity Bank founder.
Court Allows ABC Bank to Auction Munga’s Britam Shares
Billionaire businessman and Equity Bank founder Peter Munga has lost a critical court battle after the High Court ruled in favor of ABC Bank in a high-stakes loan dispute. The decision clears the way for the bank to auction 75 million shares in Britam Holdings to recover a KSh433.76 million ($3.3 million) loan.
The shares, currently valued at KSh604 million ($4.6 million), were pledged as collateral for a loan extended to Equatorial Nut Processors Ltd., a macadamia and cashew nut processing company in which Munga owns a 92% stake.
Court Rejects Injunction to Stop Auction
In a ruling delivered on January 29, 2025, Justice Francis Gikonyo (on behalf of Justice Alfred Mabeya) dismissed Munga’s request for a permanent injunction to stop the sale.
“In the absence of such payment, the prayer for a permanent injunction… is untenable and is disallowed,” the court ruled.
The court held that Munga had personally guaranteed the loan and pledged his Britam shares as security—making the auction legal and enforceable.
How the Dispute Started
In 2020, ABC Bank issued a credit facility to Equatorial Nut Processors to support its operations. When the company failed to repay, ABC issued a demand letter on September 24, 2024, notifying Munga of the bank’s intention to sell the pledged shares.
In response, Munga filed a court application in October 2024, arguing that the bank had breached Kenya’s in-duplum rule, which prevents banks from charging interest that exceeds the principal loan. The court dismissed his claim and sided with the bank.
Significantly, the court ruled that ABC Bank did not need to first pursue recovery from the company itself before going after Munga as a guarantor.
What the Auction Means for Britam
The 75 million shares make up about 3.8% of Britam Holdings, one of Kenya’s leading insurance and financial services firms. The sale could shift the balance of ownership, affecting both investor confidence and governance.
Munga remains one of the largest individual shareholders in Britam. Through his associated entities—EH Venture Capital and EHL 2022—he controls about 405 million shares, estimated to be worth KSh3.26 billion ($24.8 million).
Munga’s History with Debt
This isn’t the first time Munga has been at the center of a debt controversy. In 2023, three of his properties were lined up for auction over loan defaults. And in 2017, he narrowly avoided losing five homes in Kasarani after settling a debt with Jamii Bora Bank, now known as Kingdom Bank, at the last minute.
Why This Case Matters
Legal and financial experts say the case sends a strong message to Kenya’s corporate sector: personal guarantees carry legal weight.
“This judgment affirms that personal guarantees are enforceable—regardless of one’s stature,” said Dr. Isaac Wekesa, a corporate law lecturer at the University of Nairobi.
With Kenya facing rising levels of non-performing loans (NPLs), lenders are becoming more aggressive in recovering debts—even from prominent business figures.
What’s Next for Peter Munga and ABC Bank?
Unless Munga files an appeal, ABC Bank is expected to proceed with the auction. The sale could bring in strategic investors looking to enter Kenya’s insurance market or increase their stake in Britam.
For Munga, the ruling signals a possible shift in control over one of his flagship investments. It also marks a turning point in his legacy as one of Kenya’s most prominent entrepreneurs.