Guardian Bank case Kenya
In a major legal victory that closes one of Kenya’s longest-running commercial disputes, the High Court has ruled in favor of Shivali Investments Limited and associated entities owned by businessman Rajendra (Raju) Sanghani, against the shareholders and directors of Guardian Bank, led by the Chandaria family.
The ruling, which awarded KSh 2.5 billion in settlement to Shivali Investments and its co-claimants, brings an end to a legal saga that has lasted more than two decades. The judgment affirms the claimants’ rights under the 1999 share sale agreement that became the core of the dispute.
Background of the Case
The conflict traces back to a 1999 share purchase agreement involving the sale of 200,000 shares in Guilders International Bank Limited.
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The sellers were Shivali Investments Limited and several affiliated companies linked to Mr. Sanghani.
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The buyers were a consortium comprising Guardian Bank Limited and several individuals and firms collectively referred to as the “obligors.”
The obligors included prominent members of the Chandaria family—Amit Chandaria, Hetul Chandaria, Bhavnish Chandaria, Nisha Dinesh Chandaria, and Mahesh Maganlal Chandaria—as well as their associated companies: Conifers Trading Limited, Chandaria Holdings Limited, Dima Limited, Goldera Limited, and Kevis Investments Limited.
Court Ruling
In its judgment, the court found that the Chandaria group and their associated entities had breached contractual obligations arising from the share sale agreement. The judge ruled that the evidence presented by Shivali Investments and others was consistent, well-documented, and demonstrated that the claimants were legally entitled to compensation.
As a result, the court ordered the Chandaria family and the other defendants to pay KSh 2.5 billion as a final settlement to the plaintiffs.
Legal and Financial Implications
Legal analysts have described the ruling as a landmark victory in Kenya’s corporate litigation history, particularly in enforcing accountability among shareholders and directors of financial institutions.
The judgment underscores the importance of honoring commercial agreements and upholding contractual obligations, even in cases involving high-profile business families.
The decision may also have a lasting impact on how future corporate takeovers and share transfer agreements are handled in Kenya’s banking sector, which has seen several consolidation and ownership disputes in recent years.
End of a Two-Decade Legal Battle
This ruling effectively ends a protracted court battle that has been ongoing since the early 2000s. The dispute saw multiple filings, appeals, and arbitration attempts before the High Court rendered its final decision.
Mr. Rajendra Sanghani, through Shivali Investments, welcomed the ruling, terming it a “victory for justice and business integrity.” The Chandaria family and Guardian Bank are yet to issue a public statement on whether they intend to appeal the decision.
The KSh 2.5 billion award is among the largest commercial settlements in Kenya’s financial sector history and reinforces judicial commitment to protecting investors’ rights.