Nyachae’s son sued over Ksh.8 million Kisii property sale

Shareholders of companies linked to former Cabinet minister and businessman Simeon Nyachae have been allowed to file a derivative suit against two directors over the alleged fraudulent sale of a prime property in Kisii.

The case targets Michael Moragia Nyachae and Jamaludin Shamsudin Alibhai Rajwani, directors of Sansora Bakers & Confectioneries Limited and its parent firm Sansora Investment Ltd.

Justice Freda Mugambi ruled that the shareholders had established sufficient grounds to proceed with the suit on behalf of the companies, saying the claims were aimed at protecting the interests of the business as a whole.

At the centre of the dispute is the sale of a company property allegedly disposed of for Ksh.8 million, despite claims that its market value exceeded Ksh.35 million.

Shareholders accuse the directors of mismanagement and running the company as personal property, excluding other investors from key decisions.

They allege that the property was deliberately undervalued and sold without transparency in May 2021, at a time when family members were mourning the death of the firm’s founder.

Court filings show the property was sold to Pine Tree Real Estate LLP, a company said to be owned by Rajwani’s nephew.

The court ordered the directors to produce the sale agreement, transfer documents and proof of how the proceeds were received and used. It also barred any further sale, transfer or charging of the property pending determination of the case.

Additionally, the directors must provide the shareholders with the company’s books of accounts, bank statements, audited financial records and evidence of payment within 30 days.

The shareholders told the court the firms had been operated in secrecy, with limited disclosure of major transactions, including the contested sale.

In his response, Nyachae – who currently serves as chairman of the Development Bank of Kenya - acknowledged lapses in corporate procedures, saying the bakery historically operated without formal written resolutions but that directors acted in good faith.

The suit seeks recovery of the property and the disqualification of the two directors.

The matter will be mentioned in court on May 11, 2026.