Keroche Breweries has launched a Sh10 billion lawsuit against its former managing director, Sam Shollei, accusing him of causing reputational damage linked to an advertisement of a pending liquidation petition.

The dispute stems from a Sh75 million compensation claim by Mr Shollei, which Keroche says has been wrongly publicised.

In court documents filed at the High Court, Keroche seeks damages and a retraction of the insolvency allegations. Their lawyer, Karuku Wachira, argued that the company’s “economic role of generating taxes and jobs means the advertisement risks potential economic repercussions, strengthening the case for urgent restraint.”

Keroche directly employs 500 people, generates annual revenues exceeding Sh20 billion, and commands a 15 percent share of Kenya’s alcoholic beverage market, according to court filings.

Its chief executive, Edward Mwangi Muigai, described the company as a significant contributor to the local economy, sourcing raw materials from more than 10,000 farmers and generating foreign exchange through exports. He warned that “any insolvency threat posed an economic risk” and could trigger job losses and lower government revenue.

The court has suspended liquidation proceedings initiated by Mr Shollei over a disputed Sh75 million debt related to his wrongful dismissal compensation.

Mr Shollei, who served as Keroche’s managing director from October 2017 until his dismissal in November 2018, sought the liquidation after the company allegedly failed to honour a settlement. His lawyers allege that auctioneers faced challenges executing the court decree.

Justice Samuel Muhochi granted a temporary stay of the liquidation petition on May 23, 2025, ruling that “a temporary order of stay of the liquidation petition…is hereby issued, pending the hearing and determination of this application.” The judge also barred Mr Shollei and his agents from advertising or publicising the petition further.

Keroche’s legal team contends that the statutory demand underpinning the liquidation petition is invalid. Mr Muigai noted that the demand was signed by a High Court registrar rather than Mr Shollei or his authorised agent, breaching Section 384(1)(a) of the Insolvency Act, 2015.

“The illegality of the statutory demand invalidates the entire petition…and proceeding otherwise would perpetuate an abuse of court process,” he said.

The advertisement inviting other creditors to join the petition, published in the Kenya Gazette and newspapers in August 2025, is described by Keroche as “wrongful and unauthorised,” causing undue prejudice to the company.

The company’s lawyers argue the debt remains contested at the Court of Appeal and insist the liquidation claim lacks legal foundation.