Ahmed Ahmed Mohamed v Mohamed Kassam Mohamed & 5 others

3. The Plaintiff further prayed to have him reinstated as a director/ shareholder and a member of the Interested Party company and he be paid his share of profits and dividends from year 2007 to date. He prayed for General Damages of Kshs. 670,000,000/= and costs of the suit. 4. The Plaintiff’s case was that in year 2007, the Plaintiff and the 1st Defendant founded the Interested Party company after purchasing the lime and limestone production business from the Kenya Calcium Company Limited vide the agreement dated 14/06/2007. The Plaintiff took active management of the company in year 2007 to 2008 where the company made approximate profits of Kshs. 18,000,000/= on monthly basis. 5. In year 2008, the Defendants who were like brothers to the Plaintiff, approached him for allotment of shares in the company. A resolution was passed on 10/01/2008 increasing the shares so as to accommodate them. The Defendants further sought to actively manage the company to which the Plaintiff obliged. The Plaintiff took a backseat but he never relinquished his position as a director and shareholder of the company. 6. It is not until year 2020 when he learnt from the Directorate of Criminal Investigations officers in the cayuse of their investigations that his shares had been fraudulently transferred to the 1st Defendant. Upon enquiry from the 5th Defendant who was in active management of the company, he was informed that the shares would revert back to him once the 1st Defendant returned from India. 7. Upon the return of the 1st Defendant, the 1st Defendant apologized to the Plaintiff and sought to be given 3 months upon which he would transfer the shares back to the Plaintiff. Despite the expiry of the 3 months period, the shares were not transferred back. That is when the Plaintiff reported the fraudulent transfer of his shares to the police on 07/04/2020 and an OB No. 40/07/04/2020 issued. 8. The Plaintiff avers that he was denied access to the company and locked out from any financial dealings and benefits for the last 13 years prior to the filing of the suit. The Plaintiff was never invited to any board meetings or annual general meetings. The Defendants were accused of misappropriating the Interested Party company properties making secret profits from irregular and exorbitant procurement of raw materials. 9. The Plaintiff seeks redress for breach of duty of care as particularized in paragraph 39 of the Plaint. The Plaintiff states there exists no other suit between the parties over the said subject matter. The jurisdiction of this court is admitted. 10. In opposition to the Plaintiff’s case, the Defendants filed their Statements of Defence dated 13/01/2020 for the 1st, 3rd, 4th, 5th and 6th Defendants, and 25/05/2021 for the 2nd Defendant. In their defence, the Defendants denied all the averments contained in the plaintiff’s plaint. 11. The Defendants averred that together with the Plaintiff, they acquired 150 shares each save for the 6th Defendant who had 100 shares of the company. The Defendants contend that the business of Kenya Calcium limited was bought at a consideration of Kshs. 350,000,000/= which was solely paid for by the Defendants and the Plaintiff was invited to be a shareholder. The Plaintiff who was actively managing the company and the 5th Defendant actively manages the company to date. 12. The Defendants further averred that the Plaintiff sold his shares to the 1st Defendant for a consideration of Kshs. 8,000,000/=. The sale agreement was made on 24/10/2024 in the offices of A.B. Patel & Patel Advocates and a Transfer Deed signed by the Plaintiff in the presence of G.T. Sironyi Were Advocate and the 1st Defendant signed the Transfer Deed in the presence of Sanjeev Khagram, a partner in the firm of A.B. Patel & Patel Advocates. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 2

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13. Later in January, 2020, the Plaintiff stormed the Interested Party’s premises in Kwale claiming that he owned the said business. The 5th Defendant was in active management of the company informed him that he had sold his shares to the 1st Defendant in October, 2014. When the 1st Defendant returned to the country from India, he tried to reach the Plaintiff over the issue but to no avail. 14. The Defendants denied transferring the Plaintiff’s shares fraudulently. They only came to know of the criminal matter report to the police after they were served with the court’s papers. That is when the statutory forms effecting the transfer of shares were subjected to forensic examination by one Emanuel Kenga, who is a document examiner, and it was found that the signature in the statutory form was that of the Plaintiff after comparison of the questioned document and the known specimen signature. 15. The particulars of breach as stated by the Plaintiff were denied and the Defendants sought to have the Plaintiff’s case dismissed with costs. 16. In the Reply to the Statement of Defence by the 1st, 3rd, 4th, 5th & 6th Defendants, and which is dated 19/04/2021, the Plaintiff denied the averments by the Defendants and stated that their defence was a mere denial and thus bad in law. The Plaintiff prayed that the defence be struck out with costs to the Plaintiff. 17. In the cause of the proceedings, several interlocutory applications were made and rulings made, which includes the ruling dated 25/03/2021 in respect to the Plaintiff’s Notice of Motion dated 30/09/2020, which denied to grant injunctive orders against the Defendants, nor reinstating the Plaintiff as a director, signatory and an active member of the Interested Party company. 18. At the pre-trial stage, the matter was referred for Court Annexed Mediation, but according to the Mediation Report dated 12/09/2023, by the Mediator one Ms. Bennette Nzamba, the mediation was not successful. The matter proceeded for hearing before this court. The Plaintiff called one (1) witness to ventilate his case, whereas the Defendants called five (5) witnesses in support of their case. Plaintiff ’s Case 19. Mr. Ahmed Ahmed Mohamed,, the Plaintiff testified as PW1. He adopted his witness statements dated 07/03/2023 as his evidence-in-chief and produced the documents in the Plaintiff’s Lists and Bundles of Documents of even date as Plaintiff exhibits Nos. 1 to 22. 20. He testified that the Interested Party company was purchased by him at Kshs. 450,000,000/= vide the agreement dated 14/06/2007 (pg. 15 & 197). He gave the shares of the company to the Defendants as they introduced him to the seller of the business. The shares were distributed as per the extract of the Minutes dated 10/05/2008 (pg. 77). After about 8 months of running the company and making profits of about 85 to 90 million, he handed over the running of the company to the 2nd Defendant whom he trusted as a brother. 21. It is when he received a call of the DCI officers enquiring about the sale of his shares yet there was no payment of taxes. That is when he came to lean that his shares had been sold. He denied selling the shares to the 1st Defendant nor being in a meeting where his shares were transferred. He denied the Minutes dated 24/10/2014 (pg. 338) transferring his shares to the 1st Defendant. 22. He reported the matter to the DCI who made a report confirming that his shares had been fraudulently transferred to the 1st Defendant. He presented the report to the Registrar of Companies, and the Office of the Attorney General wrote to the Plaintiff confirming that the shares would be reverted back to him (pg. 172). https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 3

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23. In a twist of events, the Plaintiff was later charged for giving false information to the police in regard to his shares being stolen. The criminal matter against the Plaintiff was still ongoing. The Plaintiff was also sued by the Defendants for General and Exemplary Damages for making false claims against them in regard to the alleged fraudulent transfer of shares (pg. 467). 24. The Plaintiff denied that he had sold his shares for Kshs. 8,000,000/= as the current worth of his shares was about Kshs. 400,000,000/=. 25. In cross examination by Mr. Nanji Advocate, Counsel for the 1st, 3rd, 4th 5th & 6th Defendants, PW1 reiterated the contents of his evidence in chief. He admitted that there had been filed a Constitutional Petition against him and it was recommended that he be charged for giving false information. 26. He also admitted that in his statement (pg. 600), he stated that the 1st Defendant produced the finances in acquiring the business, while he serviced the machines. He also stated that he had never attended any board meeting but he acknowledged the signatures in the extracts of the board meeting minutes. He justified the same by stating that he the Defendants would give him the back page to sign, and he never saw the contents of the minutes. The Plaintiff further stated that he was in agreement with paragraph 9,10 and 12 of the Replying Affidavit dated 17/11/2020. 27. Upon cross-examination by Ms. Barasa, Counsel for the 2nd Defendant, the Plaintiff stated that he had no claim against the 2nd Defendant. On cross examination by Mr. Magolo Advocate for the Interested Party, the Plaintiff reiterated the contents of his evidence in chief. He further stated that he would sign the last page of the minutes without the contents of the rest of the document because he trusted the Defendants as they were like his brothers. 28. In re-examination, the Plaintiff stated that the documents that he signed was believed to be company returns but not transfer of shares. He maintained that he was in court because his shares had not been returned to him. He prayed that this court do grant him the orders being sought. 29. The DCI Forensic Examiner’s Report (pg. 173 to 179) was produced by consent as exhibit no. 7. The Report was prepared by Mr. John Muinde. He made a comparison of the known specimen signatures of the Plaintiff and the questioned document. He formed an opinion that both signatures were not from the same author as they were different in style of execution and form. Defence Case 30. Ms. Jesica Rwamba, DW1, the Senior Court Assistant in-charge of the Constitutional and Judicial Review Division at Mombasa High Court, produced the court file in the Constitutional Petition No. E002 f 2021. On cross examination by Mr. Cohen for the Plaintiff, the witness said that she did not know under what circumstances the Petition was withdrawn. 31. Mr. Emmanuel Karisa Kenga, DW2, the Forensic Document Examiner with over 30 years’ experience, a former document examiner with the Kenya Police but currently in private practice, gave evidence that he received instructions from Mr. Magolo Advocate to make a comparison of the known signatures of the Plaintiff and the questioned documents. He made a conclusion that the signatures were from a common origin. The witness acknowledged Mr. Muinde as his student and a document examiner. He was not aware that he had made a report related to his matter. 32. In cross examination by Mr. Cohen for the Plaintiff, the witness said he received instructions to examine the documents on 19/10/2020. He was not aware of this suit had been filed or not. He did not know the source of the documents availed and neither did he get documents from the Registrar https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 4

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of Companies. He acknowledged that Mr. Muinde and himself had made different opinions over the same matter. 33. On re-examination, he stated that he did not work on a document with a ‘certified copy’ stamp. 34. Mohamed Kassam Ahmed, the 1st Defendant testified as DW3. He adopted his witness statement dated 11/11/2022 and produced as exhibits the documents in pg. 5 & 6 (statement with the DCI), in his List of Documents. It was his evidence that the Plaintiff and himself bought the Interested Party Company where they had equal shares. 35. On cross examination by Mr. Cohen for the Plaintiff, and Mr. Magolo for the Interested Party, the witness stated that the money to buy the business was from Mohamed Issah Hardwares Limited, where the Defendants were the directors. The Plaintiff was not a director in the said company. 36. Further on cross examination by Mr. Cohen, the witness said the Plaintiff sold him his shares at a consideration of Kshs. 8,000,000/=. The Transfer Deed was signed. The money was still being held at the Advocate’s office. The witness further stated that the Plaintiff attended the meetings negotiating for the transfer of shares, and that he was present during the transfer. 37. On re-examination, the witness stated that his family company paid Kshs. 350,000,000/=to Kenya Calcium Limited. The Plaintiff left the company in year 2008 and left the country for Canada in year 2014 after the transfer of the shares to the 1st Defendant. 38. Mr. Abdulatif Ahmed Nurmohamed, the 5th Defendant and DW3, adopted his witness statement dated 11/11/2022 as his evidence in chief. It was his evidence that during a board meeting on 24/10/2014, the Plaintiff was present when the transfer of his shares was made to the 1st Defendant. The consideration was Kshs. 8,000,000/= which was paid from the family business. The money was still with the lawyers A.B Patel Advocates. 39. Mr. Sanjeev Khagram, an Advocate of the High court relied on his witness statement dated 11/11/2022 which he adopted as his evidence in chief. It was his evidence that the transfer of shares by the Plaintiff to the 1st Defendant took place in his presence and he witnessed the Transfer Deed. He confirmed that the signature in the Transfer Deed was his. 40. On cross examination by Mr. Cohen, he stated that he made a statement with the DCI, and he could not remember if the Plaintiff was present or not, or whether his signature was already on the transfer document or not. He confirmed that the Kshs. 8,000,000/= was paid to his firm. The parties were transacting in their individual capacity and not as a company hence no need for a company resolution. The witness said the Plaintiff was yet to go for his money. 41. At the close of the Defendants’ case, the court gave directions for filing of written submissions. All the parties complied by filing their respective submissions. Submissions 42. The Plaintiff in his submissions dated 02/12/2024 submitted that the transfer of shares was done contrary to Articles 3 and 4 of the Memorandum and Articles of Association. It was denied that he Plaintiff transferred his shares. The Forensic Report by the Plaintiff’s witness confirms that the signature on the Transfer Deed did not belong to the Plaintiff. 43. It was acknowledged that there were 2 conflicting expert reports on the same matter, the court was urged to make its own inference on which document is genuine. The Plaintiff relied on the case of Kagina v Kagina & 2 others (Civil Appeal No. 21 of 2017) [2021] KECA 242 (KLR) (3 December https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 5

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2021) (Judgment), Stephen Kinini Wang’ondu v The Ark and Dhalay v Republic (1995 – 1998) EA 29, in support of his argument. 44. It was further submitted that the Plaintiff had established a prima facie case after the police forensic report concluded that the Plaintiff’s signature had been forged. 45. On whether the shares should revert back to the Plaintiff, it was submitted that the transfer having been fraudulent, and the Plaintiff having not sold the shares to the 1st Defendant, and the share transfer document having not been lodged, the shares ought to be returned back to the Plaintiff and he be reinstated as a shareholder. 46. On damages, the same should be awarded as prayed in the Plaint to compensate the loss suffered after the shares were taken. He prayed that the reliefs sought in the Plaint be allowed with costs. 47. The 2nd Defendant in his submissions dated 02/05/2025 submitted that the Plaintiff failed to plead particulars of fraud and failed to proof the same. (See Vijay Morjaria v Nansingh Madhusingh Darbar & Another (2000) eKLR). Further, it was submitted that the evidence on record contradicts the allegations by the Plaintiff. For instance, the Defence witness no. 5, Mr. Sanjeev Khagram Advocate, testified that the witnessed the Shares Transfer Deed alongside his Associate one Mr., Were. 48. The 2nd Defendant further submitted that the Plaintiff had no claim against him hence the suit against him should be dismissed with costs. On the Plaintiff being reinstated as a shareholder, it was submitted that the parties having entered into a sale of shares agreement, the court cannot rewrite contracts between the parties. (See National Bank of Kenya Limited v Pipeplastic Samkolit & Another [2001] KLR 112). The Plaintiff had failed to discharge the burden of proof of forgery and fraud. 49. On damages, the 2nd Defendant submits that the Plaintiff having failed to proof fraud and the resultant harm suffered, the court has not been moved to award the said damages. It was prayed that the suit against the 2nd Defendant be dismissed with costs. 50. The 1st, 3rd, 4th, 5th and 6th Defendants in their submissions dated 22/04/2025, just like the submissions by the 2nd Defendant submitted that the Plaintiff failed to plead and strictly proof fraud. It was also submitted that the Plaintiff was being dishonest when he said that he did not sell his shares for Kshs. 8,000,000/= as his shares were worth Kshs. 50,000,000, but he was of the believe that the Kshs. 8,000,000/- was being given as profits. 51. Further, with the Forensic Report by the Defendants’ witness, it was difficult for the Plaintiff to proof that the shares were transferred fraudulently. On breach of fiduciary obligations towards the Interested Party, the Plaintiff has failed to proof that the Defendants were diverting funds to their personal accounts or making secret profits from irregular and exorbitant procurement of raw materials. It was prayed that the Plaintiff’s suit be dismissed with costs. 52. The Interested Party in its submissions dated 30/04/2025, submitted that the Plaintiff’s case having relied heavily on the Forensic Report by Mr. Muinde, which was later found to have been based on a lie, hence the subjecting of the Plaintiff to the criminal proceedings. Further, the funds to buy the business came from the Defendants and finally, Mr. Sanjeev Khagram was able to testify on what transpired during the transfer of shares from the Plaintiff to the 1st Defendant. It was prayed that the suit be dismissed wit costs. Analysis 53. I have considered and analyzed the evidence above in line with the pleadings filed, together with the written submissions by Counsels for the parties. The issues that arise for determination are – https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 6

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54. i. Whether the Plaintiff has proved that his shares were fraudulently transferred. ii. Whether there was breach of fiduciary obligation towards the Interested Party. iii. Who bears the costs. In the case of Kuria Kiarie & 2 Others vs. Sammy Magera [2018] eKLR the Court of Appeal while addressing the issue of fraud stated as follows; “ It is well established that fraud must be specifically pleaded and that particulars of the fraud alleged must be stated on the face of the pleading. The acts alleged to be fraudulent must, of course, be set out, and then it should be stated that these acts were done fraudulently. It is also settled law that fraudulent conduct must be distinctly alleged and distinctly proved, and it is not allowable to leave fraud to be inferred from the facts.” 55. It is the duty of the Plaintiff to proof that the Defendants were conscious and deliberately dishonest in the transfer of the shares to the 1st Defendant. Further, fraud must be specifically pleaded. I have perused through the Plaint dated 28/09/2020, from paragraph 37,38 and 39, it is possible to discern the particulars of fraud as pleaded. 56. The issue is whether the particulars of fraud has been proved. The Plaintiffs relying on the Forensic Report by Mr. John Muinde. He made an analysis of the signature in the Transfer Deed alleged to be that of the Plaintiff as compared to the known signature of the Plaintiff. He came to a conclusion that the said signatures were made by different sources. 57. On the other hand, the same document relied on by Mr. Muinde was also relied on by Mr. Kenga, a document examiner whose services were procured by the Defendants. In comparison of the said document with known signatures by the Plaintiff, it was concluded that the said signatures were made by the same hand. 58. The court on being faced with two conflicting expert reports stated as hereunder in the case of Kenya Ports Authority v Modern Holdings [E.A] Limited [2017] KECA 293 (KLR); “ We agree with the learned Judge that in the event of conflicting expert evidence, it is the duty of the court to consider the evidence and form its own opinion. However, in so doing the court must give cogent reasons why it prefers the evidence of one expert over the other.” 59. The onus of this court is to consider the reports and give reasons as to why it accepts or rejects one report over the other, or accepts both reports. In relying on the report, the court must consider the evidence therein together with the rest of the evidence on record. 60. Here, this court is faced with conflicting expert reports. The said reports should not be read in isolation, as this court must believe one report over the other. From the perusal of the copies of the Transfer Deeds relied on by the document examiners, it is a fact that it is one and the same document, save for the document relied on by Mr. Muinde, there a certification that the document is a true copy of the original, while the document relied on by Mr. Kenga, there is no such certification. 61. DW5, who is an independent witness identified his signature in the said document. He testified that the Transfer of Share Deed was signed in his office and in his presence and in the presence of Mr. Were, his Associate. The sale of the shares was for Kshs. 8,000,000/=, the amount which was deposited in the advocate’s office. The witness testified that the Plaintiff was yet to go for the said amount till today. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 7

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62. Further, it was the evidence of DW4, that the Plaintiff during the board meeting and as per the minutes dated 24/10/2014, agreed to sell all his 150 shares to the 1st Defendant, for Kshs. 8,000,000/=. All the shareholders were present save for the 4th and 6th Defendants. 63. It is on record that the Plaintiff admitted signing documents as presented by the Defendants usually the last page without the other pages, and he did so out of trust. On the document indicating the Kshs. 8,000,000/=, the Plaintiff alleges that he signed the same believing that the amount was profits earned. Neither of the documents allegedly signed by the Plaintiff indicates that the Kshs. 8,000,000/= was profits. 64. Further, upon investigations by the DCI, it was found that the Plaintiff gave false information to the police on his shares being fraudulently transferred. The Office of the Director of Prosecutions made a decision to charge the Plaintiff for giving false information to a police officer. 65. Further, it is on record that the Plaintiff has got no claim against the 2nd Defendant. On cross examination by Mr. Nanji for the rest of the Defendants, the Plaintiff stated that the was in agreement with paragraph 9,10 and 12 of the Replying Affidavit dated 17/11/2020 sworn by the 2nd Defendant, in response to the Plaintiff’s application dated 30/09/2020. 66. The Plaintiff agreed with the 2nd Defendant that the business operation was bought by the Defendants at Kshs. 350,000,000/=, and the Plaintiff was running the operations. The Plaintiff later withdrew from the operations and management in year 2008 handing over to the 1st Defendant, who later handed over to the 5th Defendant. 67. The criminal charges against the Plaintiff are still ongoing. Though one is deemed innocent until proven guilty, the criminal charges against the Plaintiff and the discussion herein above, tilts in favour of the defence case on the basis of the balance of probabilities that indeed the Plaintiff did transfer his shares to the 1st Defendant. I therefore find the evidence of the Defendants believable that the Plaintiff sold off his shares to the 1st Defendant for the Kshs. 8,000,000/=. 68. Under the circumstances, I choose to rely on the Forensic Report by Mr. Emmanuel Kenga, the defence witness as it is corroborated by the evidence as stated herein above. 69. On whether there was breach of fiduciary duty towards the Interested Party by the Defendants, I do agree with the submissions by the Defendant that the copies of the bank deposit slips are completely illegible. The same could not have gone without the noticing of the Plaintiff or his counsel. It cannot be discerned the kind of evidence that the Plaintiff intended to adduce. 70. Further, the said company being an Interested Party in the suit did not raise any issues at any stage of the court proceedings. In the submissions by the Interested Party, the court is urged to find the Plaintiff unreliable as a witness, and sought to have the Plaintiff’s suit dismissed with costs. The Plaintiff has failed to proof that there was a breach of fiduciary duty towards the Interested Party by the Defendants. The entire claim by the Plaintiff totally fails. 71. Section 27 of the Civil Procedure Act provides that costs follow the event. Even though the suit is to be dismissed, I consider the relationship between the parties prior to the dispute amongst them arising. I direct that each party do bear its own costs. Determination 72. In the circumstance I make the following orders - https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 8

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i. That the Plaintiff has failed to proof his case to the required standards, and the suit is hereby dismissed. ii. The Kshs. 8,000,000/= held at A.B. Patel & Patel Advocates be released to the Plaintiff forthwith. iii. Each party to bear its own costs. Orders accordingly. RULING DELIVERED AT MOMBASA ON THIS 18TH DAY OF DECEMBER, 2025 THROUGH MICROSOFT TEAMS. HON. F. WANGARI JUDGE In the presence of; Mr. Cohen Advocate for the Plaintiff Ms. Barasa Advocate for the 2nd Defendant Ms. Mulongo Advocate h/b for Mr. Nanji Advocate for the 1st, 3rd, 4th, 5th & 6th Defendant. Mr. Magolo Advocate for the Interested Party Ms. Salwa, Court Assistant NB: Typed Judgment released for uploading to the CTS on 14th January, 2026. The delay was occasioned by the bereavement of the trial Judge. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19553/eng@2025-12-18 9

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