Shahdadpuri Ghanshyam, the director of Global Apparels and lawyer Philemon Morara were charged last month over the transfer of some 125,000 ordinary shares.
High Court judge James Makau has however suspended the trial, pending the determination of a petition they have filed opposing the prosecution.
A judge has suspended the prosecution of a director of Global Apparels Limited and his lawyer over the transfer of shares in the company valued at Sh100 million.
Shahdadpuri Ghanshyam, the director of Global Apparels and lawyer Philemon Morara were charged last month over the transfer of some 125,000 ordinary shares and 750,000 preferential shares of the firm.
High Court judge James Makau has however suspended the trial, pending the determination of a petition they have filed opposing the prosecution.
Mr Morara said he acted for Suresh Lakhiani and Narain Choithram, who were the shareholders of the apparel company, under instructions to transfer the shares from Mr Lakhiani to Mr Choithram with the objective of having the two directors hold 50 percent shareholding each. The lawyer said he prepared the share transfer deed which was signed by the duo on October 14, 2016, adding that in September 2017, Mr Narain transferred his 50 percent shareholding to Mr Ghanshyam.
Before the transfer, another company—Gem Trading LLC—and Mr Lakhiani entered into a credit agreement with a Dubai firm known as M. H. Enterprises LLC for a loan, which was secured by collateral which included Mr Lakhiani’s 50 percent shareholding in Global Apparels Kenya. Mr Choithram and Mr Lakhiani passed away in October 2017 and January 2018 respectively. Mr Morara told the court that Gem Trading and Mr Lakhiani defaulted the loan, triggering a case before a Dubai court in 2018, where the firm and Mr Lakhiani’s estate were ordered to pay 14.08 million UAE Dirhams to the Dubai firm.
During this hearing however, a representative of the Lakhani estate lodged a criminal complaint against Mr Ghanshyam and Mr Morara, disputing the original split of the shareholding that awarded Mr Choithram a 50 percent holding that was later transferred to Mr Ghanshyam.
“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 Morara said.
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