Battery manufacturing firms barred from selling Eveready products

Three battery manufacturing companies have been restrained from selling, trading in, marketing and distributing Energizer and Eveready products in the country and elsewhere within the territory of the troubled Eveready East Africa Ltd.

Justice Said Chitembwe issued the temporary orders barring Energizer International Inc (EII), Energizer Middle East and Africa Ltd (EMEAL) and Eveready Battery Company USA from selling the products within the territory of Eveready East Africa Ltd (EEAL) which is not limited to Burundi, Rwanda and Uganda.

The orders were issued pending an application by Mr Daniel Kimotho, a shareholder with EEAL who is seeking an order of injunction to restrain the defendants from diverting the business of the company.

Mr Kimotho is also seeking for an order of injunction to restrain the respondents from selling, offering for sale, advertising, disposing off or attempting to dispose of, assigning or in any other manner changing control of, or dealing with their shares in EEAL.

In the application, Mr Kimotho said through his effort he discovered that Eveready and Energizer products supplied by the second respondent were products of EII and EMEAL.

He further argued that distributorship agreement between EEAL and EMEAL was terminated when the EII refused to renew it.

According to the application filed at the High Court in Malindi, EII and EMEAL intend to continue distributing the Energizer and Eveready products within the territory covered by EEAL through other agents and third parties.

“The respondents are about to relinquish their shareholding in EEAL thereby completely abandoning it,” read the application.

The applicant further argued that the business of EEAL was eroded and it lost 90 per cent of its business.

The court was also told that at the time of the Initial Public Offer in 2006, the price of a share of EEAL at the Nairobi Stock Exchange was Sh10.50 while the current price of a share is about Sh2.

Mr Kimotho further argues that EII owns a controlling share in EEAL and sits on the Board of Directors hence its actions amounted to among others, oppression of minority and mismanagement of the affairs of EEAL by a controlling shareholders and the director.

The applicant said that unless restrained by the court, together with other minority shareholders, they shall continue to suffer loss and damage as a result of the respondents’ actions.

Mr Kimotho also said unless compelled by the court the respondents shall not extend the distributorship agreement, the trademark license agreement as well as a technical service agreement with EEAL.

He added that as a consequence, the business and substratum of EEAL shall continue to deteriorate and occasioning further loss.

The judge directed the case to be mentioned on March 20 for further directions.