The sale of a property linked to one of the firms established by former politician and businessman Simeon Nyachae has triggered a fresh dispute among his children.
In a petition pending before the High Court in Milimani, one of the siblings has sought court’s nod to bring a suit on behalf of Sansora Bakers & Confectioneries Limited and the parent firm Sansora Investment Limited.
At the centre of the dispute is the sale of a property in Kisii County that was allegedly sold at Sh8 million but should have attracted more than Sh35 million.
Through lawyer Simon Njege, the siblings have accused the directors of the firm Michael Moragia Nyachae and Jamaludin Shamsudin Alibhai of running the company like a personal property to the exclusion and detriment of the company and its shareholders.
“As a result of the Defendants infractions, the Company is in a precarious position as its continued mismanagement poses a great risk to its survival over and above the irreparable damage and loss occasioned to its shareholders,” Mr Njege said in the suit.
Mr Nyachae died on February 1, 2021 and his children are locked in a succession battle after Ms Margaret Kerubo Chweya, sought to join the case claiming to be Nyachae’s wife and claim a stake sharing of the assets, offering a sneak peek into frost relationships in the polygamous family.
The sale of the premises in May 2021 has been challenged as a conflict of interest on grounds the directors have placed their personal interests above the company’s.
The directors are further accused of allegedly failing to act in good faith in promoting the long term success of the company for the benefit of all shareholders as a whole.
Among the orders sought if the application is successful is to compel the directors to produce the books of account, banking slips from sale of the property, audited financial statements and bank statements of Sansora Bakers & Confectioneries from 2021 up to date.
It is alleged that the company is being run in a secretive manner by the directors who have to date failed to share pertinent information regarding the disposal of the property including the sale agreement.
“The 1st Applicant (Sansora Investments Ltd) is acting in good faith and its actions in filing this Application and the intended derivative suit are consistent with one of a shareholder acting in adherence to the duty to promote the long term success of the company and is seeking accountability in running of affairs in the Company,” Mr Njege said.
High Court judge granted a temporary injunction against selling, transferring or charging the assets of Sansora Bakery & Confectionary Ltd, pending the hearing of the application.
In response, Mr Moragia pointed out that the bakery was one of the firms established by the late Nyachae and that it was his custom to invest surplus funds in properties for future development.
“For clarity, since incorporation of the 2nd applicant (Sansora Bakers & Confectionery ltd), the business has operated without written resolutions – directors, who have included my late father, have all along acted in good faith, based on the perceived needs of the company,” he said.
He said whenever there was need, the late Nyachae, Mr Alibhai and he would verbally agree, dispose some assets and re-invest the funds.
On his part, Mr Alibhai said the orders freezing the bank accounts had made it impossible to sustain the operations of the company.
“The freezing of the account has and continues to adversely affect the creditworthiness and goodwill of the 2nd applicant in the eyes of its suppliers as most goods are procured on credit,” he said.
