The Chandaria family loses Sh—2.5 B to Shivali Investments and other Companies Associated with Mr. Rajendra Sanghani.
In a landmark judgment, the shareholders and directors of Guardian Bank, namely the Chandaria family, have lost a long-standing legal dispute to Shivali Investments Limited and associated parties owned by Mr. Rajendra (Raju) Sanghani.
The court has awarded a settlement of KSh 2.5 billion in favor of Shivali Holdings and others, bringing to a conclusion a protracted case that has spanned several years. This ruling marks a significant development in the long-drawn legal battle and reinforces the rights of the claimants under the law.
The legal conflict originated from a 1999 agreement for the sale of 200,000 shares in Guilders International Bank Limited. The sellers were Shivali Investments Limited and other Companies.
The buyers were a group comprising Guardian Bank Limited and several individuals and companies known as the “obligors,” including Amit Chandaria, Hetul Chandaria, Bhavnish Chandaria, Nisha Dinesh Chandaria, Mahesh Maganlal Chandaria, and their firms Conifers Trading Limited, Chandaria Holdings Limited, Dima Limited, Goldera Limited, and Kevis Investments Limited.
The sellers transferred their shares but alleged they never received the agreed Kshs. 196 million purchase price. The buyers counter-argued that the bank’s assets were overvalued.
The Court of Appeal’s judgment, delivered on October 3, 2025, by Judges D.K. Musinga, F. Tuiyott, and G.V. Odunga, partially set aside the High Court’s 2023 ruling. The appellate court made several critical determinations.
Firstly, it ruled that the final Sale Agreement of December 30, 1999, was the binding contract, not an earlier Memorandum of Understanding. This finding led the court to cancel the High Court’s award of 12% annual interest, ordering instead that interest be calculated at standard court rates from the date the lawsuit was filed.
Secondly, and central to the case, the court found that the buyers failed to adhere to a crucial deadline. The Sale Agreement specified December 31, 2001, as a “cut-off date” by which Guardian Bank and the Chandaria obligors had to exhaust all efforts to recover the bank’s loans and formally notify the sellers of any amounts deemed irrecoverable.
The court found that they did not provide evidence of having complied with this condition by the deadline. A report prepared in 2014, which the buyers relied on to justify non-payment, was ruled irrelevant for determining the loan status as of the 2001 cut-off date. Consequently, the court dismissed the buyers’ counterclaim for Kshs. 827 million.
The Court of Appeal, however, acknowledged one element of the buyers’ defense. It found that the sellers, through their director, Mr. Raju Sanghani’s participation in a Debt Recovery Committee meeting in June 2000, were aware of Kshs. 6,072,346 in previously undisclosed liabilities. The court deducted this amount from the final award.
The final judgment imposes distinct obligations on the two groups of appellants. The Chandaria family obligors—Amit, Hetul, Bhavnish, Nisha, and Mahesh Chandaria and their companies—are jointly liable to pay the sellers the principal sum of Kshs. 196 million plus court-rate interest.
Guardian Bank Limited was ordered to discharge and return the securities provided by the sellers, excluding four specific properties whose sales were approved by the sellers’ directors. On legal costs, the Chandaria-family appellants were directed to bear three-quarters of the sellers’ costs, with Guardian Bank bearing the remaining quarter.
