Tycoon fights Sh100 million shares fraud case

A judge has suspended the trial of a company boss and his lawyer over the transfer of shares valued at Sh100 million, pending the determination of a petition the two have filed.

Shahdadpuri Ghanshyam Choithram, the director of Athi River EPZ-based Global Apparels Ltd, and lawyer Philemon Morara were charged last month with several counts including conspiracy to defraud, stealing, making documents without authority and uttering false documents.

They are accused of stealing 125,000 ordinary shares and 750,000 preferential shares from the heirs of two deceased shareholders.

Through lawyer Omwanza Ombati, Mr Morara told Justice James Makau that he had acted for Suresh Rewachand Lakhiani and Narain Choithram, who were shareholders of the apparel company.

He said he was directed to transfer the shares from Mr Lakhiani to Mr Choithram with the objective of having the two directors hold 50 percent shareholding each.

Armed with the required resolution, the lawyer said, he prepared the share transfer deed that was signed by the two directors and witnessed by him in his capacity as an advocate on October 14, 2016.

About a year later, in September 2017, Mr Choithram transferred his 50 percent shareholding to Mr Shahdadpuri.

Before the transfer, another company - Gem Trading LLC - and Mr Lakhiani entered into a credit agreement with a Dubai company called M.H. Enterprises LLC.

The loan was allegedly secured by collateral that included Mr Lakhiani’s 50 percent shareholding in Global Apparels Kenya Ltd. Mr Choithram died in October 2017 whereas Mr Lakhiani died in January 1, 2018.

Mr Ombati told the court that Gem Trading and Mr Lakhiani failed to repay the loan, triggering a case in a Dubai court in 2018.

In September 2019, the Dubai Court of First Instance ruled in favour of M.H. Enterprises and ordered Gem Trading and heirs of Mr Lakhiani to pay 14,080,714 UEA Dirhams.

The losing companies appealed, but the case was dismissed earlier this year.

However, as the case was pending, Harish Suresh Lakhiani, a representative of Mr Lakhiani, lodged a criminal complaint against Mr Shahdadpuri and Mr Morara over the transfer of the shares, saying the resolutions were forged.

Mr Ombati told the court that the basis of the charges is a transfer of shares that was lawfully done and thereafter used as security for the loan.

“The timing of the criminal proceedings leaves no doubt that they are intended to frustrate M.H. Enterprises LLC from realising the fruits of the litigation before the Dubai Courts, and to frustrate the determination of proceedings mounted to recognise the Dubai judgements as judgements of the High Court of Kenya,” Mr Ombati submitted.

Claims that Mr Lakhiani had not signed the loan agreement, he said, were investigated by the Dubai Court of Appeal and dismissed as unfounded allegations.

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