The High Court has barred a widow from taking over the management of a family-owned laundry business worth Sh70 million in Nairobi.
Justice Freda Mugambi said Kiran Harilal Rajput illegally declared herself a director of Capitol Laundry Limited after the death of her husband Harilal Durga Das Rajput and his brother Amritlal Durgadas Rajput who was running the company as joint directors.
“Kirani Harilal Rajput fraudulently appointed herself as a director of Capitol Laundry Limited on 19/12/2019 and her appointment is hereby cancelled. The Registrar of Companies shall hereby order that the name of Kirani Harilal Rajput be removed forthwith from the registers of directors of the company,” the judge said.
The dispute began after Chandrakant Durgadas Bhagyaraj accused his sister-in-law of illegally taking over the management of the family business after the death of his brothers Harilal and Amritlal.
He said the company is a family business founded by his late parents in 1974. Chandrakant said he discovered on December 19, 2019, that records at the registrar’s office had been tampered with and that a director had been fraudulently appointed when his brothers died.
He added that Kiran, who appeared in the forms as a director without shares, had previously held the position of director of the company.
But Kiran defended herself, saying that she was not a stranger to the company as she claimed, adding that she was appointed as the director of Capitol Laundry Limited through a decision taken in a meeting held on December 30, 2012, at the offices of M/s Bhatia Company. Registrars and company secretaries.
She also confirmed that as a director of the company, she had always been a signatory to the company’s accounts. Kirani also stated that as a beneficiary of her late husband’s estate, it was in her best interest for the company to continue to operate smoothly.
In her ruling, Justice Mugambi said Chandrakant and Kiran would jointly manage the account of Capitol Laundry Limited pending the administration of the deceased directors’ estates and the appointment of new directors.
“I agree that in the meantime, the operations of the company should continue and as such, I would be inclined to introduce Chandrakant as a signatory on the company account with Kiran as she is the administrator of Harilal’s estate to allow the company to fulfill its obligations. I do so on the basis of the special limited grant dated 27/2/2020, which was issued to Chandrakant for the purposes of prosecuting this matter.”
But Justice Mugambi rejected the request to appoint Chandrakant as interim director of the company.
“I note that the parties are engaged in probate and administration proceedings for the estates of the deceased directors. These proceedings will determine who the intended beneficiaries are and over time the shares will be transferred to the intended beneficiaries. Once they become shareholders, they can appoint directors,” the judge said.
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