Family feud rocks Sh600m road firm

Monday November 10 2014

A dispute between two brothers over the management of a family enterprise has spilled to the courts and now threatens to bring down Dhanjal Brothers Limited, a Mombasa-based road construction firm. PHOTO | FILE

A dispute between two brothers over the management of a family enterprise has spilled to the courts and now threatens to bring down Dhanjal Brothers Limited, a Mombasa-based road construction firm. PHOTO | FILE 

EUNICE MACHUHI
By EUNICE MACHUHI
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A dispute between two brothers over the management of a family enterprise has spilled to the courts and now threatens to bring down the business.

The wrangle at Dhanjal Brothers Limited, a Mombasa-based road construction firm, has turned into a legal duel after an aggrieved brother filed a petition to have the company wound up on allegations of fraud.

The Sh600 million company deals in land acquisition, construction, building, maintenance, leasing as well as acquisition and purchase of merchandise and other properties.

Mr Joginder Singh Dhanjal, who is a director in the company, has accused his younger brother Daljit Singh Dhanjal, who acts as the managing director, of fraud.

According petition papers filed at the High Court in Mombasa on Friday, he (Joginder) claims that his brother transferred some of the shares to himself using “devious means, intimidation and coercion”.

The petitioner says he learnt about this when he signed documents on September 19 whose contents he did not understand.

ILLEGAL TRANSFER

He says his brother had informed him that they (papers) were share transfers to their sisters in the UK as part of their entitlement to their father’s stake in the company.

The petitioner says he realised later that he had signed his own shares over to his brother after which he wrote to the company secretary, Equatorial Secretaries and Registrars, asking them not to effect any changes in the company.

In response, through a letter dated October 6, Equatorial Secretaries and Registrars, confirmed that no share transfers had been effected from September 19 as feared although transfers had actually taken place earlier on June 20 — including the petitioner’s shares being transferred to his brother.

Mr Joginder Dhanjal added that it was confirmed that no company meeting had ever been called or taken place to approve the transfers.

He, however, noted that company resolutions and minutes had been drawn, suggesting that a meeting had taken place.

The petitioner said he was not aware of any meeting where the said resolution was passed, adding that he signed the documents “as a result of coercion, duress and intimidation by Mr Daljit”.

He said the alleged board of directors meetings were held in the absence of the company secretary and therefore all resolutions passed were unprocedural, illegal and void.

The petitioner also alleged that Daljit had excluded him from the management of the company affairs and had failed to account for the day-to-day business and financial affairs of the company.

FRUSTRATED EFFORTS

The petitioner claims that he has not been supplied or given reasonable and proper access to either financial records or secretarial reports of the company, nor have there been regular board meetings convened to examine and provide direction for the company’s operations.

Additionally, he claims that despite being a director and a shareholder, his brother has constantly frustrated his efforts to enquire or get involved in the affairs of the company.

The petitioner further claims he has never been called for any company meeting contrary to the articles of association.