Jack & Jill owner swoops friends shares in rowMonday January 17 2022
Jack & Jill Supermarket owner Schon Ahmed Noorani has used secrets of his friend’s vast wealth to attach shares in eight companies after failing to repay a debt of Sh200 million.
Mr Noorani had loaned his friend and businessman Rajendra Ratilal Sanghani Sh477 million between August 1, 2012 and April 26, 2018 and promised to repay at an annual interest of 18 percent.
Mr Sanghani paid back part of the loan but filed for bankruptcy while still owing his friend a balance of Sh167 million.
He admitted the debt but said he fell into financial difficulties due to harsh economic conditions. So, he approached Mr Noorani to discuss possible restructuring of the debt he was paying in instalments.
When the bankruptcy application was rejected by Justice Francis Tuiyott, saying the businessman had vast properties including buildings in Nairobi’s Riverside area and in Mombasa, Mr Noorani sought to attach shares in several companies held by Mr Sanghani to recover the debt, which has since hit Sh200 million.
Justice Wilfridra Okwany last year ordered the directors or agents of the eight companies to furnish the court with financial documents and account of money or dividends due to Mr Sanghani. The matter will come up on March 23 to confirm whether the cited companies have complied with the directive.
The companies include Real Management Services 2002 Ltd, Real Court ltd, Fiona Investments Ltd, Croydon Investments and Twiga Properties Ltd. Others are Gut Ventures ltd, Shivali Holdings ltd, Jyotin Investments Ltd and Granada Trading Company Ltd.
When Mr Sanghani filed for bankruptcy in 2018 seeking court’s protection, Justice Tuiyott noted that the businessman did not dispute the claim by Mr Noorani that he owns vast estates, including houses on Riverside Drive worth Sh450 million, another property on Lenana Road valued at Sh300 million and two other properties in Mombasa worth Sh500 million.
The judge dismissed the insolvency application, saying it was clear that the motive was to attain a collateral objective of granting protection to an undeserving debtor.
“While the court is not expected to carry out a detailed examination as to the fortunes (perhaps misfortunes) of the debtor, the evidence presented must be such as to make out a prima facie case that the debtor is insolvent and is unable to pay his/her debts,” the judge said.
He said a debtor is then required to give a true and full inventory of his creditors and debtors and other liabilities and assets.
In Mr Sanghani’s case, the judge noted that the businessman failed to give particulars of his other creditors and debtors and other liabilities and assets. Under Section 304 of the Insolvency Act, a debtor can seek interim orders to allow him make a proposal, which provides for a person to act as supervisor on voluntary arrangement.
Later attempts by Mr Noorani to attach the said properties were thwarted after it emerged that they had been registered under names of different persons. Left with no option, Mr Noorani moved back to court and successfully applied to attach the shares in the eight companies.
Mr Noorani through the law firm of Maingi Musyimi & Associates told Justice Okwany that Mr Sanghani was a multi-millionaire living lavishly.
Mr Sanghani opposed the application and maintained his willingness to pay the debt. He initially argued that the directors of the cited companies were not parties to the case but the judge noted that they had been served with court documents.
Evidence presented in court showed that both were good friends and Mr Noorani advanced Sh477 million to Mr Sanghani.
Although the debtor called his creditor a shylock, the latter maintained he is an investor but advanced the money to his friend after promising to repay the amount with interest.
Mr Sanghani told the court that talks or arrangements to pay the debt by instalments had collapsed, forcing him to move to court.
The entry of new shareholders into the companies might complicate the affairs of the said firms.