The legal teapot is overflowing, and this week’s serving comes from the simmering boardroom of Directline Insurance. In the latest twist, two heavyweight shareholders, Sureinvest Company Limited and Triad Networks Limited, have filed a High court petition to stop the Attorney General from poking around in the company’s affairs.

The AG recently assembled an investigation team with a wide brief: examine Directline’s finances, corporate governance, and regulatory compliance, rewind the clock all the way back to 2005 to scrutinise shareholding and directorship changes, and sift through allegations of record manipulation and breaches of statutory provisions. The probe also promises “corrective measures” to restore order and investor confidence.

The shareholders insist the AG has overstepped. Their argument? The Companies Act does not give the AG carte blanche to launch such an inquiry without court sanction. They claim they were never notified of the investigation, despite formally requesting to be heard, and were shut out of the process entirely. They add that many of the issues the AG now wants to revisit have already been decided in arbitration, or are still before the High Court and the Insurance Appeals Tribunal. In their view, this is a classic case of sub judice and a breach of the separation of powers.

And there’s a backstory, a rather dramatic one. Trouble allegedly began in April 2018 with the death of co-founder and chairman John Gichia, son of Royal Media Services boss SK Macharia. The shareholders claim that soon after, Mr Macharia took over Directline’s management in a way they deem irregular, setting off a chain reaction of disputes over control and shareholding disputes.

The matter went to arbitration before Phillip Bliss Aliker, culminating in a May 2022 award. According to shareholder and lawyer Kevin McCourt, the majority shareholders, a group including AKM Investments Limited, Janus Limited, Sureinvest Company Limited, Stenny Investments Pty Limited, and Triad Networks Limited, control a hefty 90.336 percent stake. McCourt says this entitles them to compel the minority shareholders to hand over immediate control.

The latest curveball came last month, when the majority shareholders learned that Royal Credit Limited, associated with Mr Macharia, had made a report to the AG under section 800 of the Companies Act. That report triggered the current investigation but McCourt says they have not been given the complaint, the names of the investigation team, or the terms of reference.

Now, the matter is squarely before the High Court. Will the AG’s probe go ahead, opening up more chapters in an already tangled corporate saga? Or will the shareholders succeed in pouring cold water on what they see as an unnecessary and unlawful stir of the pot? One thing is certain: when it comes to Directline Insurance, the tea keeps brewing, and it is strong enough to rattle the cups.