The Kisii land fraud case has exploded into one of the most explosive family-linked corporate disputes in recent years. Shareholders connected to the late powerful politician and businessman Simeon Nyachae have moved to court over the alleged fraudulent sale of prime land in Kisii town worth more than Sh35 million.
They accuse company directors, including his son Michael Moragia Nyachae, of secretly disposing of the property at a throwaway price. The High Court has now opened the door for a full trial, setting the stage for a fierce legal showdown.
The property at the centre of the Kisii Land Fraud saga allegedly changed hands for just Sh8 million in May 2021. Shareholders insist the land was worth over Sh35 million at the time of sale.
They argue that the transaction was not only irregular but also deliberately structured to undervalue a key company asset. In a decisive ruling, High Court Judge Freda Mugambi allowed shareholders to proceed with a derivative suit on behalf of Sansora Bakers & Confectioneries Limited and its parent firm Sansora Investments Ltd.
The judge ruled that the case met the legal threshold under Sections 238 and 239 of the Companies Act, 2015. She confirmed that the reliefs sought aim to protect the company as a whole. That decision has now pushed the Kisii land fraud allegations into full public scrutiny.
How the Kisii Land Fraud Allegedly Unfolded
Court documents paint a troubling picture of how the disputed transaction allegedly happened.
Shareholders accuse directors Michael Moragia Nyachae and Jamaludin Shamsudin Alibhai Rajwani of running the company like personal property. They claim the two sidelined other shareholders and made major decisions without transparency.
Michael Nyachae currently serves as Chairman of the Development Bank of Kenya, a position that adds weight to the controversy.
According to the suit, the directors sold the Kisii property to Pine Tree Real Estate LLP. The firm allegedly belongs to Rajwani’s nephew, raising fresh questions about conflict of interest.
Shareholders argue that the sale occurred when much of the Nyachae family was still grieving the death of Simeon Nyachae. They claim they remained unaware that critical company assets were being disposed of during that sensitive period.
They further allege that the directors deliberately depressed the property’s value to justify the Sh8 million sale price.
If proven, the Kisii Land Fraud claims could reveal a coordinated effort to strip value from the company while keeping other shareholders in the dark.
Directors Accused of Secretive Management
The applicants state that the company has operated in secrecy for years. They claim directors failed to share books of account, audited financial statements, or bank statements. They also argue that the company’s financial position has become precarious due to alleged mismanagement.
In court, Justice Mugambi ordered the directors to produce the sale agreement, transfer documents, and proof that the company received the purchase price.
She went further and barred any transfer, sale, or charging of the disputed property until the case concludes.
The court also ordered the directors to supply shareholders within 30 days with:
• Books of account
• Banking slips showing receipt of the Sh8 million
• Audited financial statements
• Company bank statements from 2021 to date
These orders signal that the court takes the Kisii land fraud allegations seriously. The derivative suit seeks not only to recover the property but also to disqualify the two directors from continuing to manage the companies.
Michael Nyachae Admits Procedural Breach
In a twist that could shape the outcome of the case, Michael Nyachae admitted that the company breached formal procedures under company law.
He stated that since incorporation, the bakery business operated without written resolutions. He said directors, including his late father, acted in good faith based on the perceived needs of the company.
He argued that the company followed informal practices for years and that those practices did not amount to fraud.
However, legal experts note that admitting procedural breaches strengthens the argument that corporate governance standards may have been ignored.
The shareholders insist that good faith cannot excuse the sale of a Sh35 million property at Sh8 million without proper documentation and shareholder approval.
They maintain that the Kisii Land Fraud case represents more than a family dispute. They say it exposes deeper governance failures in companies linked to powerful political families.
The matter will now proceed to a full hearing scheduled for May 11, 2026.
As the case unfolds, it will test the limits of accountability within family-run corporate empires. It will also send a signal to directors across Kenya about the risks of sidelining minority shareholders.
If the court finds that the property was deliberately undervalued and sold to a related party without transparency, the consequences could extend beyond financial recovery. The directors could face disqualification and reputational damage.
