New Bluebird Aviation valuation halted

The Court of Appeal has suspended plans for a second valuation of Bluebird Aviation as sought by a founder member who has since fallen out with his partners.

The High Court had in May appointed PricewaterhouseCoopers Limited to conduct a second valuation of the airline after Mr Adan Abdi Yusuf rejected Sh320.9 million as the value for his 25 percent shares.

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His former partners-turned rivals were not satisfied with the directive for a second valuation, which seeks to ascertain the value of Mr Yusuf’s shares.

Mr Hussein Unshur Mohammed moved to the Court of Appeal arguing Mr Mohamed Abdikadir Adan had already deposited Sh320,912,500 at the Judiciary account and the share transfers had also been executed as directed by the court in April.

Further, the court was informed that Mr Hussein Ahmed Farah, another founder, had allegedly sold his shares to a third party based on the valuation report.

Mr Mohammed argued that if the stay is not granted the decision will be implemented before the appeal is heard and that will render it useless if it succeeds.

“In conclusion, we are satisfied that the applicant has satisfied both limbs for grant of stay under rule 5(2) (b) of the Court’s Rules,” Justices Daniel Musinga, Hellen Omondi and Ngenye Macharia said.

The judges added that they were in agreement with Mr Mohammed’s lawyers that a party cannot be allowed to maintain an advantageous position that he has gained from a flawed decision because he is able to pay damages.

The airline was founded in 1992 but Mr Yusuf fell out with his former partners, ex-Kenya Air Force officers, Col Farah and Major Mohammed and Mr Abdikadir.

Mr Yusuf later accused his former partners of sidelining him from the management of the firm and filed multiple cases in court until three years ago when the court directed his partners to buy him out.

He had sued his former co-directors seeking $1.5 billion, which he claimed was denied by his partners for over 25 years, through cooking books and excluding him from company affairs.

High Court judge Njoki Mwangi later directed a valuation of the airline to facilitate Mr Yusuf’s buyout.

RSM (East Africa) Consulting Ltd prepared a report and placed Mr Yusuf’s shares at Sh320 million but he challenged it saying it did not reflect the true position of his shares.

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Justice Mwangi agreed with Mr Yusuf and said there was no transparency and independence in the preparation of the business valuation report, which was integral in the final report, especially when a valuer is appointed by rivaling parties.

The company has over 23 aircraft according to information posted on its website.

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