Asian tycoon Raju Sanghani is back in the news again but as usual, due to his alleged swindling tricks and conmanship. This time round, Guardian Bank has filed a Sh827 million claim against former owners of Guilders International Bank following a disputed sale of the bank 20 years ago.
Raju was once convicted and jailed at Kamiti Maximum Prison for months. He is currently having family troubles with word his wife has deserted him. Well known in the world of cons during the Daniel Moi era, he was close to Philip Moi.
During the Mwai Kibaki era, his name featured prominently as one of those who invited the Artur brothers in Kenya. Weekly Citizen has now established that Raju together with his brother- in-law Pradeep Shah popularly known as PK Shah have allegedly fleeced members of Asian community millions of shillings.
The two allegedly swindled Guilders depositors millions of shillings when the bank was taken over by Guardian Bank. It has since emerged that the depositors were not in books of Guilders when Guardian took over the bank.
Guardian Bank bought Guilders Bank International as a bailout since GBI was facing financial loses, capital and liquidity erosion at that time.
However, Guardian Bank says it later discovered that several of the loans listed as performing were actually unrecoverable, and that a number of securities Guilders Bank shareholders gave as security for the deal turned out to be defective.
Guilders’ former owners have moved to court to claim they have never been paid their shares of Sh196 million, a move sharply disputed by Guardian Bank.
The sale took place in 1999, and the shareholders of the two banks agreed that any undisclosed liabilities like non-performing loans would lead to amendment of the agreed Sh196 million purchase price.
The Sh196 million purchase price was equivalent to Guilders’ net asset value. At the time, Guilders’ books indicated that it had issued loans of Sh829 million and of that, Sh678 million was recoverable.
Guardian Bank now says that it was only able to recover loans of Sh261 million which struck out any claim by Shiv Ali Investments, Naval Holdings Limited, Ketty Investments Limited and Saaf Holdings—Guilders’ former shareholders—for payment of the Sh196 million.
Their companies Conifers Trading Limited, Chandaria Holding Limited, Dima Limited, Golden Limited and Kevis Investment Limited have also been enjoined as respondents in the suit.
Guardian Bank has, however, filed a counterclaim for Sh827 million with interest accruing each year.
It adds that Guilders International Bank’s shareholders had until six years from October, 1999 to file any case under the Limitation of Actions Act.
“On the contrary, upon conducting an audit of the accounts in Guilders, the defendants discovered that the plaintiffs had misrepresented the true net value of Guilders as at December 31 1998; the true value of the total loan portfolio recoverable and performing in respect of Guilders; and that the consideration for all their shares in Guilders was based on the net worth of Guilders which was itself not accurate.”
“In any case and entirely without prejudice to the foregoing, the plaintiffs’ claim for breach of contract is brought outside the six-year period permitted under the Limitation of Actions Act and is therefore caught by limitation,” Guardian bank states. The change in claim was objected by the bank as time barred.
Sanghani further claims that Guardian Bank used accounting standards not agreed to during the buyout to claim Sh827 million from Guilders International Bank’s former owners.
Under the deal, Guilders Bank’s shareholders were to provide assets worth Sh380 million as security to shield Guardian Bank from making losses from non-performing loans previously listed as recoverable.
It appears that despite various representations by the owners of Guilders International Bank during the sale, securities of some of the loans classified as performing turned out to be defective. That Raju is a con artist is no secret, it is claimed.
Together with PK Shah, they obtained title deeds in bank transaction as blanket security to cover deficiencies in balance sheet of Guilders. The fraud was discovered when Guardian Bank was to release the titles to right owners after court judgment.
One such case involved is title deed of Ndege Wholesalers. It was civil case 788 of 1997. Chikoo Limited and Nair were defendants in the case. In the case, Chikoo was accused of frequently selling property to Nair. Shashikat J Kharti was in court as director of Ndege while Pradeed Karamshi Shah was defendant of Nair Limited.
Another director of Chikoo was Ashok Lakhani. The late Hezekiah Oyugi was a director with Chikoo. How the property was transferred to Nair of PK Shah shocked many. Also sucked into the case were Job Oyugi and his brother Douglas Oyugi. The registrar of lands was ordered to cancel of Nair title deed and issue new title to Ndege Wholesalers.
While testifying in court during the case, PK Shah shaking in front of the judge could not control his bladder and openly urinated in his trousers.
Asian sources revealed that PK Shah will always hide behind Raju whenever in trouble. Raju is associated with Twiga Towers and development of real estate’s on Murang’a Road which he does and manages on behalf of tycoon Philip Mbindyo, a former Treasury PS who was deeply involved in the Goldenberg scandal.
Aware of his criminal activities in land grabbing and swindling investors, Raju’s operations are discreet. He has two homes in Nairobi one at General Mathenge Road in Westlands and another in Spring Valley but he is rarely found there.