Mr Maganlal Chandaria. FILE | NATION MEDIA GROUP.
By BRIAN WASUNA
In Summary
- Mr Dodhia claims the Chandarias owe him the money for shares acquired in Sonal Holdings as per the legal agreements signed ahead of the acquisition.
- Mr Chandaria, his son Mahesh and seven grandsons have sued Sonal Holdings’ Paresh Kumar Dodhia, who has promised to file bankruptcy proceedings against the Chandarias if they do not pay him Sh950 million compensation in failed takeover deal.
- The Chandarias have obtained a temporary court order barring Mr Dodhia from filing the bankruptcy proceedings until their suit is heard and determined.
- The Chandarias reckon that Mr Dodhia intends to use the bankruptcy proceedings to arm-twist them into dropping a Sh473 million claim they have made against him and his company Sonal Holdings in a separate suit.
Billionaire businessman Maganlal Chandaria’s family
has opened a major legal battle against pharmaceutical company Sonal
Holdings over a Sh950 million takeover deal gone sour.
Mr Chandaria, his son Mahesh and seven grandsons have sued
Sonal Holdings’ Paresh Kumar Dodhia, who has promised to file bankruptcy
proceedings against the Chandarias if they do not pay him Sh950 million
as compensation for the failed attempt to acquire Sonal Holdings in
2009.
Mr Dodhia claims the Chandarias owe him the money
for shares acquired in Sonal Holdings as per the legal agreements signed
ahead of the acquisition.
The Chandarias have obtained a temporary court
order barring Mr Dodhia from filing the bankruptcy proceedings until
their suit is heard and determined.
The Chandarias reckon that Mr Dodhia intends to use
the bankruptcy proceedings to arm-twist them into dropping a Sh473
million claim they have made against him and his company Sonal Holdings
in a separate suit.
Mr Dodhia insists that Maganlal represented the
interests of all the parties involved in his company, and that his
grandson Hetul’s signature appears in some of the agreements executed in
the failed share sale.
Most prominent
The Chandarias, one of the most prominent business
families in Kenya, has since 1947 thrived in the consumer goods industry
where they run different enterprises.
Maganlal’s business empire includes Madhu Paper,
Kenya Paper Mills, Global Petroleum and Guardian Bank in Kenya as well
as manufacturing plants in Tanzania, India and the United Kingdom.
The group has since 1979 run Garnetts Paper Mills at Atley in Yorkshire, UK, and acquired Vista Paper, in Bombay in 1985.
In 1999, Maganlal acquired First National Bank and
merged it with Guardian Bank, the lender he had started in 1996 before
ultimately merging with Guilders Bank International.
He reckons that the planned purchase of Sonal
Holdings shares aborted midway after Mr Dodhia failed to provide crucial
information about the firm that was needed for purposes of ascertaining
its true financial position.
The businessman claims that it was at that point
that his family agreed to lend the pharmaceutical company and its owner,
Mr Dodhia, some Sh473 million.
The loans were extended through Madhupaper Kenya
Limited (Sh81 million), Global Petroleum Kenya (Sh30 million) and
Chandaria Industries (Sh362 million).
“Mr Dodhia and Hetul discussed various ways of
assisting and it was suggested that this be by purchase of shares in
Sonal. But the parties did not agree in principle and the transaction
aborted.
"However, Mr Dodhia requested for financial
assistance and money was advanced to him as loans by Guardian Bank,
Madhupaper Limited, Chandaria Industries and Global Petroleum Products
Kenya,” Maganlal says
“Concerned that Mr Dodhia was ignoring demands for payment, lawyers were instructed to file suits to recover the money.
Bankruptcy proceedings
But rather than effect payment, Mr Dodhia issued a
notice of intention to institute bankruptcy proceedings arising out of
an alleged memorandum of understanding dated December 10, 2009 claiming
Sh950 million.”
The Sonal Holdings founder, however, claims that
when he demanded payment from the Chandarias for the shares they had
acquired, Maganlal shifted goalposts claiming that the Sh950 million was
to acquire a 100 per cent stake.
Among the key conditions for the deal, according to
Mr Dodhia, was that Sonal Holdings would shift its operations to a
warehouse in Nairobi’s Baba Dogo area owned by Chandaria Industries.
Mr Dodhia adds that he was also to become an employee at Sonal, which would be managed by the Chandarias.
Mr Dodhia says that the Chandaria family took over
his company in 2009 after he met his end of the deal but has to date not
fully paid the agreed transaction price of Sh950 million.
Maganlal, however, insists that the agreements Mr
Dodhia is using to claim Sh950 million from the Chandarias is a forgery,
as the original documents neither stated the number of shares to be
acquired nor the purchase price.
He has also contested the Sh950 million being handwritten and not printed, unlike the rest of the document.
“I signed on each page of the agreements and recall
that the purchase price of Sh950 million was handwritten on the first
page of the first agreement, which Hetul had already signed on behalf of
the other plaintiffs. The second agreement provided that the plaintiffs
had bought 100 per cent of my shares,” Mr Dodhia says.
The Sonal Holdings founder says he has to date received only Sh7 million of the promised Sh950 million.
“Despite having acknowledged the contract and
benefited from the fruits thereof, the plaintiffs have refused to pay
the consideration in full. I fully complied with the terms of the
agreement, particularly working for the plaintiffs but I have only
received Sh7 million yet they have been trading, operating, borrowing
and lending as Sonal Holdings and carrying themselves as the
management,” he adds.
Maganlal, however, insists that the memorandum of
understanding is time-barred as per the law and can therefore not be
used to claim any money from him or his family.
bwasuna@ke.nationmedia.com
No comments :
Post a Comment