SK Macharia’s Company Fined Ksh 85 Million For Abusing Buyer Power
The Competition Authority of Kenya (CAK) fined Directline Assurance Company Limited Ksh85 million for exploiting its buying power against two Nairobi-based vehicle repair shops.
The decision came after an investigation revealed that the company connected with media magnate and Royal Media Services (RMS) owner, SK Macharia, had delayed payments to small businesses despite the completion of repair work.
According to CAK, the impacted garages offer services such as panel beating, spray painting, and mechanical repairs on automobiles.
Directline had contracted them in 2023 and 2024 to repair insured automobiles based on insurer-commissioned examinations.
In May 2024, the two garages filed separate complaints with CAK, stating that Directline had refused to honour invoices for finished work, placing the tiny enterprises in a vulnerable financial position.
In their complaints, they included authorization letters, invoices, customer satisfaction notes, and correspondence to back up their accusations.
Press Release: CAK Penalizes Directline Assurance Company Limited KES 85 Million for Abuse of Buyer Power. pic.twitter.com/TgdEpvrb91
— Competition Authority of Kenya (@CAK_Kenya) December 3, 2025
During the investigation, the authority examined the commercial connection between Directline and the two garages to determine whether the insurer had greater bargaining power and whether it had been abused, with the CAK affirming both points.
At the time the allegations were filed, the insurance owed one of the garages Ksh7.6 million and the other Ksh5 million.
Following the CAK’s involvement, the insurer partially settled the invoices, leaving the auto service providers with amounts of Ksh4.7 million and Ksh1.3 million.
However, the authority noticed that Directline explained the delays by alleging temporary inaccessibility to its bank accounts.
Despite this explanation, the insurer failed to react to the CAK’s correspondence or provide status updates on the issues, ignoring at least nineteen formal notices.
In accordance with CAK’s mandate, Directline was penalized Ksh42.5 million for each instance of buyer power abuse and ordered to pay all outstanding invoices in full.
The insurer has also been told to change its supplier contracts to include interest on late payments.
Speaking on the ruling, CAK Director-General David Kemei said, “The penalties levied are commensurate with the gravity of the offence, as well as the conduct of the accused party during the investigation.
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“Misuse of buyer power, which cripples suppliers, defeats the country’s aspiration of promoting inclusive economic development.”
He added, “SMEs are liquidity-constrained enterprises. Failure to honour payments for work done can destroy a business and render thousands jobless.
“Supply contracts between parties to a commercial relationship should be equitable and the product of candid engagements.”
Even so, it was not immediately clear whether the insurer, which has in the recent past been battling ownership wrangles, will appeal the outcomes or honour them in totality.
SK Macharia’s Company Fined Ksh 85 Million For Abusing Buyer Power
